Today, the Bulgarian prosecutor’s office announced that the Bulgarian offices of cryptocurrency lender Nexo had been raided “with the aim of neutralizing illegal criminal activity.” Bulgarians Kosta Kantchev and CEO Antoni Trenchev founded Nexo. Kantchev was previously Trenchev’s boss at the Bulgarian consumer credit company Credissimo.

“A client of the platform who transferred cryptocurrency has been officially classified as an organizer of terrorist activities,” said Svetlio Vasilev, who heads the CyberCrime division. He added that so far no one has been charged, but 15 locations are being searched and more persons of interest are being discovered.

The investigation involves 300 people, including 35 investigators from various government departments, such as the police and the National Security Service.

In response to the allegations, Nexo took to Twitter, stating that it has over 30 AML and compliance employees and that blockchain is terrible for illicit financing due to its traceability.

He went on to say: “Unfortunately, with the recent regulatory crackdown on cryptocurrencies, some regulators have recently taken the kick first, ask questions later approach. In corrupt countries, it is on the brink of organized crime, but that too shall pass.”

Nexo currently has assets under management of $2.4 billion, down from $15 billion in mid-2021.

Major competitors such as BlockFi and Celsius are now bankrupt following the cryptocurrency crash. Nexo is trying to acquire Singaporean competitor Vauld, which is also involved in insolvency proceedings. Vauld has finished negotiations.

In September of last year, the New York Attorney General filed a lawsuit against Nexo, alleging that its trading and lending products require a stock broker’s license and a commodity broker’s license that it does not have.

We did a mini-research on Nexo in early 2021. At the time, their website didn’t show any licenses, but it did say it was regulated. We contacted support asking who or what country it was regulated by, and were told that the information was not available and there was no way to find out. However, he updated his website about a month later, revealing additional information.