SOFIA, Jan 13 (Reuters) – Four Bulgarians have been charged with participating in an organised crime group set up to launder money and commit tax and computer fraud, investigators and prosecutors probing crypto lender Nexo said on Friday.
Prosecutors on Thursday said they launched an investigation into alleged illegal activities conducted by Nexo, carrying out raids at the lender’s office and 14 other sites in the capital Sofia.
“This is an unprecedented investigation,” Borislav Sarafov, head of Bulgaria’s National Investigation Service told reporters, saying Bulgaria would take the lead in a probe that started several months ago in coordination with U.S., British and other counterparts.
Investigators said they looked through over 4 million crypto transactions on the Nexo platform and found some were made in violation of EU and U.S. sanctions against Russia, while others involved a person known for financing “terrorist” activities.
Crypto lender Nexo denied any wrongdoing.
“There was a flurry of allegations, all of which Nexo vehemently denies as the platform utilizes the highest possible standards with regard to know-your-customer and anti-money laundering practices to ensure the safety of our customers and the enterprise as well,” it said in a statement to Reuters.
The company said it was the target of politically motivated campaign ahead of looming early elections in Bulgaria. It said that its systems were up and running at present, and everything was being processed in real time.
More than 20 people have been questioned so far and an international financial audit of Nexo will be conducted, with prosecutors saying the investigation is likely to take months.
Officials said two of the charged had already been detained and prosecutors will seek bail of 1 million levs ($553,801.85) each, while search warrants have been issued for the other two.
The four charged had operated in the United Kingdom, Switzerland, Bulgaria and the Cayman Islands since 2018, officials said.
Some 300 investigators, police officers and security officers were involved in the operation on Thursday, which was part of a probe “aimed at neutralising an illegal criminal activity” of Nexo, according to the prosecutors’ office.
Prosecutors on Friday said the accused had luxury properties in Dubai and the Bahamas, including yachts. Some 35 works of art, including those by Salvador Dali, Henri Matisse and Pablo Picasso, had been seized from one of the accused, investigators said.
According to Bulgarian prosecutors, crypto transactions worth $94 billion were made through the Nexo platform in the past five years.
Investigators said they had detected a number of transactions on Nexo from people and companies subject to European Union and U.S. sanctions on Russia, as well as other United Nation sanctions, without elaborating.
Crypto lenders act like banks for the crypto world, offering customers interest on cryptocurrencies they deposit with the platform.
Lawmakers around the world have stepped up calls for regulation of crypto firms following the collapse of a major exchange, FTX, last year.
Nexo in December said it would phase out its U.S. products and services over the coming months due to clashes with regulators.
($1 = 1.8057 leva)
Reporting by Tsvetelia Tsolova; Writing by Jason Hovet; Editing by Mark Potter, Mark Porter and Deepa Babington
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