Bulgarian crypto-lender bank Nexo plans to sue the Bulgarian government following a police raid on its office in Sofia on Thursday. In response to investigations against the company, Nexo complained about the actions of law enforcement authorities, according to news reported on January 13. The firm is under investigation for money laundering and other offenses.
The raid involved a group of more than 300 police officers, prosecutors, and foreign agents, said Sika Maleva, a spokesman for Bulgaria’s chief prosecutors. She also said that the investigation is currently confined to Bulgaria.
The reports said that in addition to the local police, some foreign agencies were also involved in the investigation.
Nexo believes that the raid in its office was illegal. A search warrant was not provided for hours, and police did not provide identification. Also, it was a shameful act, according to the crypto platform, which the authorities did for publicity.
The company is reportedly preparing to sue the authorities for damages caused by the sudden police intervention. The company has expressed confidence that it will win the court.
The firm stated on Friday:
“The compensation that Bulgaria will pay after Nexo wins the case will be another record breaking amount of hundreds of millions, but, unfortunately it will be at the expense of the Bulgarian taxpayer.”
Due to potential problems with the local government, the company also stressed that it does not offer any crypto services to Bulgarians.
Nexo Amid Fraud Allegations
The Bulgarian allegations also proved as a turbulent time for the crypto-lending industry. Well-known lending platforms like BlockFi and Celsius have fallen into bankruptcy. However, after the decline in digital asset prices, Nexon was one of the few remaining actors in the crypto space.
According to prosecutors, the crypto lender has been charged with organized crime, money laundering, tax evasion, unauthorized banking, and violating sanctions against Russia.
Sofia prosecutors said more than $94 billion had passed through Nexo over the previous five years.
Bulgarian prosecutors searched around 15 sites in Sofia in an investigation on January 12. As these were suspected of being involved in fraudulent activities carried out by Nexo.
Siyka Mileva said to press:
“We have taken active steps in the framework of investigations aimed at neutralising the illegal activities of Nexo.”
The activity was conducted from the territory of Bulgaria, and the main operators of the scheme are Bulgarian citizens, she added.
“Evidence has been collected that a person who used the platform and transferred cryptocurrencies has been officially declared a terrorist financing person.”
Nexo said it is “co-operating fully” with relevant regulators and authorities.
A crypto lending platform, Nexo, was founded in 2018. Kosta Kanchev and Antoni Trenchev own it. The company enables users to purchase and sell over 60 cryptocurrencies and provides complex derivative products also.
According to Nexo’s previous statement, more than 650 people are employed in Sofia. The crypto lender claims to be one of the largest in the crypto world, as it has processed over $130 billion for more than 5 million users in more than 200 regions. Meanwhile, there are no current reports about Nexo.