Nexo sees 10% of assets withdrawn after police raid

Nexo saw $46 million leave its addresses following a reported Bulgarian police raid on its offices over accusations of being “a large-scale scheme for financial crimes, money laundering and violations of international sanctions against Russia.”

Local news outlet Novinite reported that the Bulgarian national television reported that Nexo was hit by a raid as part of “an international operation against a large-scale scheme for financial crimes, money laundering and violations of international sanctions against Russia.”

The investigators suspect that Ruja Ignatova led the firm — the woman who led the OneCoin pyramid scheme and one of the top 10 most wanted people by the FBI, also wanted by Europol and Interpol.

Amid the panic, nearly 10% left Nexo’s wallets within 24 hours.

According to data provided by blockchain analytics service Arkham intelligence, $46 million worth of cryptocurrency left Nexo’s wallets in under 24 hours, bringing the balance down from $466 million to $420 million.

Nexo sees 10% of assets withdrawn after police raid - 1 — Nexo’s wallet balance in dollars from Jan. 12 to Jan. 13. | Courtesy of Arkham Intelligence.

The largest transactions made with Nexo’s wallets over the last 24 hours include a sale of over $38 million worth of stablecoin Binance USD (BUSD) to a Binance deposit address, and two transactions depositing $19 million of BUSD to Paxos’ Binance deposit address each.

The reason why those transactions were carried out is so far unclear to the public.

Prosecutors and investigators from the National Investigation and State Agency for National Security began searches of Nexo offices alongside foreign agents in Sofia. There are allegations that “the owners of the company, who are Bulgarians, have appropriated part of the assets amounting to several billion dollars.”

“The compensations that Bulgaria will pay after the claims filed and won by Nexo will be another record breaking amount of hundreds of millions, but, unfortunately, they will be at the expense of the Bulgarian taxpayer.”

Nexo.

Investigations into Nexo’s activity started a few months ago when foreign agencies detected transactions purportedly aimed at skirting the sanctions imposed on Russian banks, companies, and citizens. Local news outlet BTA reported that Nexo will sue Bulgaria over the raid and claimed that the raid is aimed at “looting a prosperous business.”

The report follows Nexo acquiring a license to operate in Italy at the end of November 2022. The firm has also been sued at the end of November by a group of investors who alleged the company blocked them from withdrawing $126M worth of crypto assets.