Nexo hit by Withdrawals Tsunami After Bulgaria Raid Office to Investigate Alleged Money Laundering

The major crypto lender Nexo has been hit by a tsunami of customer withdrawals after the company’s office in Bulgaria was raided by police.

The raid at Nexo’s Sofia, Bulgaria office happened on Thursday at more than 15 sites across Sofia, Reuters reported. It added that more than 300 investigators, police and security officers were involved in the operation.

Nexo is being investigated for fraud, money laundering and tax evasion, multiple media outlets have reported. In a statement from the Bulgarian Prosecutor’s Office, Nexo’s business was referred to as “an illegal criminal activity.”

“In Sofia, active steps are being carried out as part of a pre-trial investigation aimed at neutralizing an illegal criminal activity of crypto lender Nexo,” Siyka Mileva, spokesperson for the Bulgarian Prosecutor’s Office, said during a press conference.

Customers rush to withdraw

Not surprisingly, the raid at multiple Nexo sites in Sofia has led to a rush of customer withdrawals from the crypto lending and borrowing platform.

The outflows were highlighted on Twitter by blockchain intelligence firm Arkham, which said it had registered “floods of outflows” from Nexo’s on-chain wallets after the raid.

On-chain tracking firm Cielo also took to Twitter to share data that it said shows “large Nexo withdrawals and movements.”

Judging from the screenshot in the tweet, several large transactions worth hundreds of thousands of dollars each have been sent from Nexo-controlled wallets.

Nexo “never makes compromises” on compliance

The crypto lender itself also commented on the raid on Twitter, stressing that it has always done its best to stay fully compliant through its years in business.

“Over the years, we have turned down a lot of business because Nexo never makes compromises with regard to our very stringent anti-money laundering and know-your-customer policies,” Nexo said.

The company added in a follow-up tweet that it always cooperates with authorities. This has been done despite the fact that “some regulators have recently adopted the kick first, ask questions later approach,” it said.

Nexo phasing out US business

The raid at Nexo’s offices in Sofia comes after the company in December said it would phase out its business in the US after hitting regulatory roadblocks in the country.

“Our decision comes after more than 18 months of good-faith dialogue with US state and federal regulators which has come to a dead end,” Nexo stated on its website at the time.

Unchanged token price

The price of Nexo’s own NEXO token was more or less unchanged over the past 7 days, despite the bad news coming out of Bulgaria. At the time of writing, the token traded at $0.712, down 0.3% for the past 24 hours and up a mere 0.8% for the past 7 days.

Nexo is today headquartered in London, but the company was founded by Bulgarian entrepreneurs Antoni Trenchev, Kosta Kantchev and Kalin Metodiev.