Bulgarian prosecutors drop case against Nexo execs, citing no evidence of criminal activity

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Bulgarian prosecutors drop case against Nexo execs, citing no evidence of criminal activity
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The Prosecutor’s Office of the Republic of Bulgaria has halted criminal proceedings against four individuals connected to cryptocurrency lender Nexo.

In a Dec. 22 notice, the prosecutor’s office concluded that “there was no evidence of committed crimes” by four Bulgarian nationals charged following a raid of Nexo’s offices in January. Authorities said there was no evidence of money laundering, tax crimes, or computer fraud that would constitute an organized crime group.

The individuals charged initially following the Nexo raid were identified as Kosta Kanchev, Antoni Trenchev, Trayan Nikolov and Kalin Metodiev. Prosecutors alleged in January that the Nexo executives participated in an organized criminal group from 2018 to 2023 aimed at profiting from crypto lending but said in its Dec. 22 announcement that Bulgaria lacked a legal regime covering crypto assets.

‘[T]he products offered by Nexo are not financial instruments,” said the prosecutor’s office. “The provision of services to clients in relation to these products does not fall within the scope of investment services. Given that cryptoassets are not currently financial instruments, their trading is also not subject to regulation.”

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As part of its investigation, prosecutors said Nexo’s activity was “probably managed outside the country,” as the platform claimed in its threats to file a lawsuit. Though Nexo has offices in the United Kingdom, Bulgaria and Switzerland, it claims not to offer services to residents of Bulgaria. 

“The dropping of all charges made against Nexo and its executives by the Bulgarian Prosecutor’s Office, with their confirmation that there were no crimes, unequivocally shows that the whole attack on Nexo was political and should not have happened in the first place,” said Trenchev. 

Related: Nexo investigation is not political, Bulgarian prosecutors say

Following the January raid, Nexo agreed to a $45-million settlement with the United States Securities and Exchange Commission and North American Securities Administrators Association for failing to register the offer and sale of its Earn Interest Product — a deal that settled cases brought by multiple U.S. state securities regulators. The platform shuttered the product in April.

The settlement with U.S. regulators followed a December announcement by Nexo in which the lending firm said it planned to wind down operations in the country. The company said there was “a lack of regulatory clarity” in the United States, making the decision to leave “regrettable but necessary.”

Magazine: US enforcement agencies are turning up the heat on crypto-related crime

Update (Dec. 22 at 8:45 PM UTC): This article has been updated to include a statement from Nexo.



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