Crypto lender Nexo wants to sue Bulgaria after office raids

Published at: Jan. 13, 2023

Troubled cryptocurrency firm Nexo is planning to sue the Bulgarian government in the aftermath of massive raids at the company’s offices in Sofia.

Nexo has complained about the actions of the law enforcement authorities in response to the investigation against the firm, the Bulgarian News Agency reported on Jan. 13.

The company is reportedly preparing to file a lawsuit against the authorities to seek compensation for damages caused by the abrupt police interruption. One report suggested that investigators did not provide a search warrant for hours, while inspectors had never identified themselves.

Nexo believes that the raids conducted in its offices yesterday were against the law and demonstrated “total incompetence of those conducting this shameful action.” Nexo also described the actions against the firm as the “local Bulgarian arbitrariness” which allegedly aimed to "destroy and loot a prosperous business.”

The firm also emphasized that Nexo doesn't offer any services for Bulgarian residents due to potential issues with the local government. The company also reiterated that it has been compliant with Anti-Money Laundering requirements as well as sanctions against Russia, in addition to cooperating with major crypto intelligence firms like Chainalysis.

The firm expressed confidence that it will win the lawsuit, which will provide Nexo with compensation for the damage caused by the investigation, stating:

“The compensations that Bulgaria will pay after the claims are 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.”

Siyka Mileva, a spokesperson for Bulgaria’s chief prosecutors, said that the investigation against Nexo involved more than 300 police officers, prosecutors and national security agents. She also noted that the probe is currently limited to Bulgaria, with local police officers searching 15 addresses related to Nexo as of Jan. 12. Other reports indicated that some foreign agencies were also involved in the investigation.

Nexo’s statement came shortly after the company reportedly experienced massive outflows amid the investigation reports.

According to crypto analytics platform Arkham Intelligence, Nexo has seen “floods of outflows” since the news broke. Blockchain tracker Cielo Finance also reported on large withdrawals from Nexo, highlighting transactions with more than 200,000 USD Coin (USDC) stablecoin leaving the platform on Jan. 12.