Nexo strongly denies fraud allegations after arrests in Bulgaria

Cryptocurrency lender Nexo “vehemently denies” the allegations brought against it by Bulgarian prosecutors after four people were arrested Friday as part of an investigation into the company.

said a spokesperson for Nexo management Decrypt They were unable to confirm whether those arrested were company employees.

The Bulgarian prosecutor’s office said during a press conference that the arrested Bulgarian citizens are accused of money laundering, tax crimes, computer fraud and unlicensed banking, according to the English-language Bulgarian News Agency. heresy.

Nexo, a London-based digital asset platform, lends customers money and uses the proceeds to pay interest. It is one of the last cryptocurrency lenders, as its main competitors Celsius and BlockFi both filed for bankruptcy last year.

At the time, Nexo said it only offers secured loans. This means that it tends to pay out lower returns than what BlockFi and Celsius used to offer. In June, its website said it was exposing customers to “essentially no risk.” This language has since been removed and replaced with the pledge to “never lend without collateral”. (Disclosure: Nexo is one of the Decryptp. 22 investors.)

The company has repeatedly said the investigation and the raid on its offices yesterday were politically motivated.

“We witnessed a very bewildering press conference by the Bulgarian Public Prosecutor’s Office, which, as is widely known, [has] Nexo’s spokesperson said Friday morning that it has a bad reputation and conviction and has been routinely used by shady figures as a means of corporate raids. “It is also clear that the prosecution has no understanding of blockchain technology or financial institutions and markets in general.”

Yesterday, the Bulgarian Public Prosecutor’s Office announced its intensified investigation into Nexo, which has an office in Sofia. While it remains unclear how the investigation will proceed, it appears that users are in a rush to get their money from the Nexo platform after an office raid.

An archived copy of Nexo’s real-time confirmation tool shows that Nexo has 133,263 BTC in customer debt, worth roughly $2.4 billion, as of Thursday morning. By Friday morning, it had fallen to 124,939 BTC, a change of about $68 million over the past day.

Cielo Finance, an on-chain data tracker, shared a screenshot on Twitter It shows hundreds of thousands of dollars worth of USD Coin (USDC), Binance USD (BUSD), and Ethereum leaving the platform in large transactions.

“I can confirm that all systems are up and running and everything is being processed in real time as always and volume is currently orders of magnitude lower than post-Celsius and post-FTX,” a Nexo spokesperson said of withdrawals.

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