“Unprecedented Investigation” Leads to Arrests in Nexo Case

• Four Bulgarians were last week charged with being part of an organized crime group that used Nexo for its activities
• Officials from Bulgaria’s National Investigation Service called the investigation “unprecedented”
• The coordinated investigation has involved over 300 officers from multiple countries

Four individuals from Bulgaria were last week charged with being part of an organized crime group that used crypto lending and exchange platform Nexo for its activities in what officials have called an “unprecedented investigation”. The group is alleged to have used Nexo to launder money and commit tax and computer fraud, following a large-scale raid on the lender’s office and 14 other locations in Sofia as part of the investigation. The probe, which began several months ago in coordination with U.S., British and other counterparts, is being led by Bulgaria’s National Investigation Service (NSIS). 

Four Million Transactions Analyzed

NSIS and its allies analyzed over four million crypto transactions on Nexo platform and found that some to be in violation of EU and U.S. sanctions against Russia, while others were linked to a known financer of “terrorist” activities. Officials have stated that over 20 individuals have been questioned in relation to the investigation and an international financial audit of crypto lender, Nexo, will be conducted. The investigation is expected to take several months.

Two of the individuals charged have been detained and prosecutors are seeking bail of $553,801 for each of them, while search warrants have been issued for the remaining two individuals. The four individuals charged with participating in the organized crime group had been operating in the United Kingdom, Switzerland, Bulgaria, and the Cayman Islands since 2018.

Luxury Properties Seized

Some 300 investigators, police officers, and security officers were involved in the operation on Thursday which was aimed at neutralizing the illegal criminal activity of Nexo. Luxury properties in Dubai and the Bahamas, including yachts, were found to be in possession of the accused. Additionally, 35 works of art, including those by Salvador Dali, Henri Matisse and Pablo Picasso, were seized from one of the accused, according to investigators.

Bulgarian prosecutors have stated that crypto transactions worth $94 billion have been made through the Nexo platform in the past five years. Transactions on Nexo from people and companies subject to European Union and U.S. sanctions on Russia, as well as other United Nations sanctions, have been detected by investigators, though they have not provided further details.

Nexo Denies Wrongdoing

For its part, Nexo denied any wrongdoing in the matter, telling Reuters:

There was a flurry of allegations, all of which Nexo vehemently denies as the platform utilizes the highest possible standards with regard to know-your-customer and anti-money laundering practices to ensure the safety of our customers and the enterprise as well.

Nexo also claimed that it was the target of a politically motivated campaign ahead of looming early elections in Bulgaria, which officials have denied.

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