Bulgarian authorities were investigating the activities of cryptocurrency firm Nexo, with a number of offices searched and people being questioned, Siika Mileva, spokesperson for the country’s prosecutor-general, said on January 12.
Mileva said that the pre-trial proceedings were focused on investigating allegations of organised crime, money laundering, tax crimes, providing banking services without the required licence, and computer fraud.
She said that investigators had proof that a Nexo client, who used the company’s platform to transfer cryptocurrencies, was a person officially designated as financing terrorism, but gave no further details.
More than 300 law enforcement personnel, including police, gendarmerie, investigators and State Agency for National Security staff, were involved in the investigation, Mileva said. The pre-trial proceedings were under the supervision of Sofia City Prosecutor’s Office.
Searches and questioning were still underway and any indictments would be filed after the data collected was analysed, Mileva said.
Mileva said that the people under investigation were Bulgarian nationals and the company, which she repeatedly described as a “cryptobank”, was operating primarily from Bulgaria.
She said that the law enforcement actions were in Bulgaria only and declined to say which foreign law enforcement agencies might be involved. Mileva said that she was “hopeful” that more information would be made available on January 13.
In a series of tweets, Nexo said that it “never makes compromises with regard to our very stringent anti-money laundering and know-your-customer policies” and was “always cooperating with the relevant authorities and regulators.”
“Unfortunately, with the recent regulatory crackdown on crypto, some regulators have recently adopted the kick first, ask questions later approach. In corrupt countries, it is bordering with racketeering, but that too shall pass.”
A report by public broadcaster Bulgarian National Television earlier in the day claimed that the investigation was also looking into breaches of international sanctions imposed on Russia.
Last year, New York attorney general Letitia James filed a lawsuit against Nexo “for failing to register with the state as securities and commodities brokers or dealers and for lying to investors about their registration status.” The lawsuit was filed against Cayman Islands-registered Nexo Inc. and Nexo Capital, Inc.
Securities regulators from eight US states – California, Kentucky, Maryland, New York, Oklahoma, South Carolina, Washington and Vermont – filed cease-and-desist orders against Nexo in September, CNBC reported at the time.
(Photo: Leszek Soltys/freeimages.com)
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