Nexo hit by client outflows after raids on Bulgarian office
The crypto lending platform Nexo recorded a substantial outflow of client funds amid reports of raids at its Bulgarian office as part of an investigation into potential AML-policy violations.
Floods of outflows seen from @Nexo wallet addresses on-chain.
This follows news that Nexo Bulgarian offices were raided by special police this morning.
Stay safe.https://t.co/kU5L01rjQ1 pic.twitter.com/ylPDn9j91z
— Arkham | Crypto Intelligence (@ArkhamIntel) January 12, 2023
The Bulgarian prosecutor’s office operation involved more than 300 people.
«Active investigative actions are underway in the capital to neutralize the illegal activity surrounding the crypto-bank Nexo», — according to a statement.
According to the ministry spokesperson Siiki Milevov, the raids are connected with checking information on allegations of the platform used by members of an organized crime group, including money laundering, tax violations, fraud and providing banking services without a license.
The company said it is cooperating with the investigation and with regulators.
We are always cooperating with the relevant authorities and regulators, and we are hopeful that we will have some exciting news in the weeks to come. 7/
— Nexo (@Nexo) January 12, 2023
«In one of Nexo’s offices in Bulgaria there are representatives of authorities. They requested AML- and tax-related documents about a Bulgarian firm in the group. The latter does not serve clients but performs back-office functions — payroll, client support and compliance with regulatory requirements», — commented Decrypt CEO Nexo Antoni Trenchev.
According to analytics firm Cielo, withdrawals in WETH, BNB and stablecoins were in six- and seven-figure sizes.
💸 Large Nexo withdrawals and movements right now.
👀👀 https://t.co/Dy2UsASler pic.twitter.com/FY2dgrZ52m
— Cielo (@CieloFinance) January 12, 2023
«We are not seeing unusual withdrawal activity. Everything is proceeding as normal», — Decrypt representatives of the platform.
Nexo plans to sue the Bulgarian government after the police raid on the Sofia office. The platform intends to seek compensation for the damage.
According to the media, investigators did not identify themselves and did not present a search warrant for several hours. Nexo called these actions “abuse of power,” aimed at “destroying and looting a thriving business.”
Earlier in December, Nexo announced a ‘gradual winding down’ of its US operations due to regulatory pressure.
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