The Ministry of Internal Affairs and the Prosecutor’s Office conducted a large-scale action against the global cryptocurrency player Nexo. There were searches and searches at 15 addresses in Sofia. At the moment, there is no information about detainees.
An organized criminal group is being investigated for money laundering, tax crimes, crimes related to the provision of banking activities without a license, as well as computer fraud. This was announced at the briefing by the spokesperson of the chief prosecutor Siika Mileva.
“In the territory of the capital, active investigative actions are being carried out with the aim of neutralizing illegal criminal activity of the Nexo cryptobank. This cryptobank has created and maintains an international platform for exchanging and providing loans for cryptocurrency. It was established during the pre-trial proceedings that the main organizers of this activity are Bulgarian citizens and the main activity is from the territory of the Republic of Bulgaria”said Mileva.
The action is part of an international operation against a large-scale scheme for financial crimes, money laundering and violations of international sanctions against Russia.
“For the last 5 years as turnover more than $94 billion has passed through the cryptocurrency platform. Evidence has been gathered that a client of the platform is a person who has been officially declared to be financing terrorist acts“Mileva revealed.
According to her, the cryptobank operated through numerous registered commercial companies, the majority of which are “mail boxes, that is hollow companies”.
“More than 300 people participated in the large-scale operation. Such a thing has never been done before. These are 35 investigators from the National Investigation Service, employees of the National Security Service, the gendarmerie, employees of the SDVR”Siika Mileva also said.
The cryptobank has operated in several countries, and in some of them it was banned, said the head of the “Cybercrime” department at the Ministry of Internal Affairs, Svetoslav Vassilev.
“You know about their problems in the US. They are formally leaving the States, although this has not happened. The investigation is currently underway and searches and seizures are being carried out at over 15 addresses – new addresses of people connected to the Nexo crypto platform have been identified, and new faces, some of them are in Bulgaria”Vassilev said.
It is currently unclear whether any arrests have been made in the case and charges have been filed. This will happen at a later stage in view of the collected evidence, it became clear from Mileva’s words.
The business model at work
The Bulgarian cryptobank Nexo is among the largest in the global cryptocurrency industry. According to her confessions, she manages assets worth 2.4 billion dollars for her clients. It operates in the unregulated world of cryptocurrencies, which allows banking without regulation.
Its business model is very similar to the well-known financial pyramids that operated in our country at the dawn of democracy in the 90s, but this time with cryptocurrencies.
“Nexo” works through companies registered in offshore zones, USA, Great Britain and Switzerland. Its business is operationally managed from Sofia, with about 600 people employed through NDS working for it.
Depositors in the crop bank are invited to invest in bitcoins and other types of cryptocurrencies with promises of high returns. The interest rates they would receive were many times higher than those of classic banking institutions and various brokerage houses.
Problems come when promises start to be broken. This is how claims are filed against Nexo. The first is from a hundred customers of the company in California with a claim for 5 million dollars. The latest, for now, is from three Irish entrepreneurs who are claiming $59 million. They accuse the company of freezing accounts and subsequently forcing them to sell at a significantly lower than market price.
A case has been filed against Nexo by the prosecutor’s office in New York. Because of the pressure from the company, they announced some time ago that they were leaving the American market, which was about 30% of the group’s portfolio. But apparently that didn’t happen.
The investigation into the activity of the crypto company in our country began a few months ago, after foreign services detected suspicious transactions. “Over 3,600,000 transactions to and from the crypto exchange have been detected, some of them with extremely risky exchange players”said the head of the “Cybercrime” department at the Ministry of Internal Affairs, Svetoslav Vassilev, at the briefing.
Some of the transactions were aimed at circumventing the sanctions imposed by the European Union, Great Britain and the United States against Russian banks, as well as companies and citizens from Russia, BNT claims.
Nexo’s owners
The cryptobank “Nexo” is connected to the former deputy from the “Reformer Bloc” Antoni Trenchev, his partner Kosta Kanchev and the son of the former social minister Lidia Shuleva – Georgi Shulev.
Kalin Metodiev and Sokol Yankov are also involved in the case, bTV reported, referring to unofficial information.
At the moment, there is no official announcement from the company on the matter. Instead, a series of tweets were released. In them, Nexo explains what measures they take against money laundering.
“Unfortunately, some regulators have adopted a raid-first, ask-later approach. In corrupt countries, this borders on racketeering, but this too shall pass”the company also wrote on Twitter.
