Bulgarian Prosecutor's Office Drops Nexo Investigation Due to Lack of Evidence
Summary:
The Bulgarian Republic's Prosecutor's Office has ended its investigation into four individuals linked to cryptocurrency lender Nexo due to lack of evidence. The individuals were initially accused of participating in an organized crime group aimed at profiting from crypto lending. Despite having offices in several countries, Nexo maintains it does not offer services to Bulgarian residents. Nexo previously settled with the U.S. Securities and Exchange Commission and the North American Securities Administrators Association for $45 million due to failure to register an offer and sale of its product. The firm discontinued its operations in the U.S. citing unclear regulatory guidelines.
The Bulgarian Republic's Prosecutor's Office has ceased criminal investigations into four individuals linked to cryptocurrency lender Nexo. On December 22, it was announced that there was "no evidence of criminal activity" perpetrated by four Bulgarians who were implicated following a January sweep of Nexo's premises. The authorities couldn't find any proof of money laundering, tax fraud, cybercrime, or affiliation with an organized crime syndicate.
The persons initially implicated post Nexo search were Kosta Kanchev, Antoni Trenchev, Trayan Nikolov, and Kalin Metodiev. In January, the prosecutors claimed that these Nexo executives were involved in an organized crime gang between 2018 and 2023 aimed at profiting through cryptocurrency lending. However, it was declared on December 22 that Bulgaria lacks appropriate legal framework related to crypto assets.
The Prosecutor’s Office stated that Nexo’s offerings are not classified as financial instruments and service provisions related to these products are not investment services. As cryptocurrencies are not recognized as financial instruments, their trading is also exempt from regulation. As an integral part of the inquiry, it was indicated that Nexo's operations were "likely managed abroad," aligning with the platform's claim in its lawsuit threats. Despite having offices in the UK, Bulgaria and Switzerland, Nexo maintains that it doesn’t offer services to Bulgarian residents. A request for comment from Nexo remained unanswered at the time of report.
Following the January raid, Nexo consented to a settlement of $45-million with US Securities and Exchange Commission and North American Securities Administrators Association for not registering the offer and sales of Earn Interest Product, appeasing the complaints lodged by several US state securities regulators. The platform discontinued the product in April. The settlement followed Nexo's December declaration of its plans to cease operations in the US, citing the lack of clear regulations as the reason for making this decision, which it described as "unfortunate but necessary."
Related: Bulgarian prosecutors deny that the Nexo investigation is politically motivated.
Published At
12/22/2023 11:20:02 PM
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