Bulgaria drops Nexo investigation, no evidence of fraud
Bulgarian authorities have dropped an investigation into Nexo.
Nexo was a non-MLM crypto Ponzi pitching passive returns of up to 10% annually.
Despite not being registered to offer securities in Bulgaria and thus operating illegally, in closing their investigation the Prosecutor’s Office claimed they found
no evidence of money laundering, tax crimes, computer fraud, and providing banking services without a licence.
A US regulatory investigation by the SEC found Nexo had laundered ~$9 billion through securities fraud. Nexo settled the SEC’s charges in January 2023 for $45 million.
As reported by Sofia Globe, unlike their US counterparts, Bulgarian authorities are unwilling to uphold the law.
The prosecutor’s office statement on December 22 said that Bulgaria had no regulatory framework regarding cryptocurrency assets and Nexo’s products were neither investment, nor financial instruments.
This is in stark contrast to the SEC’s position on Nexo;
“If you’re offering or selling products that constitute securities under well-established laws and legal precedent, then no matter what you call those products, you’re subject to those laws and we expect compliance,” said Gurbir S. Grewal, Director of the SEC’s Division of Enforcement.
Offering unregistered securities in Bulgaria is very much illegal. Securities in Bulgaria are regulated by the Securities Market Supervision, which Nexo isn’t and has never been registered with.
Bulgaria’s investigation into Nexo started in late 2022. Authorities at the time were investigating what they referred to as an “organized crime group”, suspected of “money laundering, tax offenses, banking without a license (and) computer fraud”.
This is in line with the SEC’s finding in the US.
In January 2023, the same month the SEC filed charges, Bulgarian authorities raided fifteen addresses in Bulgaria’s capital, Sofia.
Following the raids, Bulgarian authorities claimed
evidence has been collected that a person who used the platform and transferred cryptocurrencies has been officially declared a terrorist financing person.
Nexo was co-founded by Bulgarian nationals Antoni Trenchev and Kosta Kantchev.
BehindMLM’s interest in Nexo was piqued following a report from Novanite, which tied Trenchev and Kantchev to OneCoin.
According to Novinite, prosecutors suspect that Bulgarians behind Nexo participated in a scheme orchestrated by Ruja Ignatova.
The suspicions are that the Bulgarians behind the large company acted according to the scheme of Ruja Ignatova and the OneCoin pyramid led by her.
Upon learning they were under investigation in the US, both Trenchev and Kantchev are reported to have fled to Dubai.
A visit to Nexo’s website today reveals the company is still pitching investors on annual returns of up to 16%.
Nexo remains unregistered to offer securities with the SEC or Bulgaria’s Securities Market Supervision.
As of November 2023, SimilarWeb tracked ~2 million monthly visits to Nexo’s website.
The majority of Nexo’s website traffic originated from Argentina (16%), Italy (13%), Spain (9%), France (6%) and the UK (5%).
Nexo isn’t registered to offer securities in any of these countries.
Yeah so if you were wondering how OneCoin is still headquartered and operating openly in Bulgaria…
FYI they are not ‘securities’ in the UK… They have to apply AML though.
Can’t speak for the rest.
Will point out for the vast majority of tokens (Ozedit: snip, see below)
FYI passive investment scheme = securities offering. This is true in every country on the planet that has a regulated financial market.
Like Bulgaria, the FCA is notorious for not regulating MLM related securities fraud.
If you wish to discuss tokens that’s a separate matter that has nothing to do with investment schemes like Nexo.
Passive Investment Scheme in the UK like a earn program in Nexo isn’t a security, like i said, our laws are quite clear. (Ozedit: snip, see below)
Yes, the laws in the UK are quite clear. If you’re offering a passive investment scheme you’re either registered with the FCA or are committing securities fraud.
fca.org.uk/firms/authorisation (scroll down to “consumer investment firms” and then “investment platforms”).
Notwithstanding the FCA banned all crypto investment schemes in October 2023.
Every country with a regulated financial market has some sort of securities law equivalent. Now please sit down. Thanks.
For any country to declare ‘No evidence of fraud’ (for something as obviously illegal as this ponzi is) must be involved in it themselves, or there are mafia protection units ensuring that the kingpins and the criminals within their ponzi schemes remain untouched.
Shocking.
In Bulgaria there is no mafia in government, the government is the mafia.
rferl.org/a/bulgaria-sanctions-us-peevski-boshkov-zhelyazkov-corruptiion/31287870.html
Interesting. I thought onecoin was closed after the collapse.
@ Tom
You really have no idea what you are talking about.
If you are actually in the UK you need a universal credit benefit for failing to understand basic English.
That or you are a serial ponzi promoter in the UK who says things like this to cloud things – a Khan, Zahir, Islam brother, Kamran Hye, etc