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Bulgarian authorities charge four individuals following raid on Nexo office: Report

Following the Jan. 12 raid on its Sofia offices, Nexo described prosecutors’ actions as a “kick first, ask questions later” approach.

Less than 48 hours after a raid on cryptocurrency lender Nexo’s offices in the Bulgarian capital of Sofia, prosecutors have reportedly charged four people.

According to a Jan. 13 report by Bloomberg, authorities charged four Bulgarian nationals with forming an organized crime group, which may have included activities related to money laundering and unlicensed banking. The country’s National Police Service reportedly seized a number of assets as part of the investigation, including cryptocurrency, cash, and computers.

Following the Jan. 12 raid, Nexo described prosecutors’ actions as a “kick first, ask questions later” approach. The company reportedly planned to file a lawsuit seeking compensation for damages caused by police actions, alleging authorities did not show a search warrant or identify themselves to Nexo employees.

“We are always cooperating with the relevant authorities and regulators,” said the lending firm.

George Naydenov, a frontend developer at Nexo’s Sofia office, said on LinkedIn: 

“I thank the Bulgarian Prosecutor's Office for trying, of course, in the most incompetent and pathetic way to take away the work of over 600 people in Nexo including me.”

It’s unclear which individuals and what role they may have held at Nexo were involved in the arrests. The lending firm has roughly 600 employees in Sofia.

Related: California files order against Nexo interest account, says it’s 8th state to take action

Founded in 2018, Nexo operates an investment platform allowing users to stake and borrow against crypto. The company has offices in the United Kingdom, Bulgaria, and Switzerland, but reportedly does not offer its services to Bulgarian residents due to potential issues with the local government. In December, Nexo announced that it planned to phase out its services in the United States, citing the lack of a clear regulatory-compliant path forward.

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Nexo Bitcoin Withdrawals Surge Following Raid of Bulgarian Offices

Nexo Bitcoin Withdrawals Surge Following Raid of Bulgarian OfficesAfter the offices of crypto lender Nexo were raided in Bulgaria, the digital currency lending platform experienced a significant amount of withdrawals starting Jan. 12, 2023. An archived snapshot of Nexo’s real-time attestation shows that the company held 133,263 bitcoin on that day. As of Jan. 13, 2023, Nexo’s attestation indicates that the company now […]

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Crypto Lender Nexo Under Investigation for Alleged Money Laundering, Russian Sanction Violations in Bulgaria

Crypto Lender Nexo Under Investigation for Alleged Money Laundering, Russian Sanction Violations in BulgariaAccording to several reports, Bulgarian law enforcement officials are investigating crypto lender Nexo for alleged money laundering and sanctions violations. Siika Mileva, a spokesperson for Bulgaria’s attorney general, said the probe into Nexo is a large-scale operation involving 300 investigators from various agencies, including the National Security Service, Gendarmerie, and Sofia Police. Bulgarian Law Enforcement […]

FBI Cracks $290M Crypto Scam—Trade Coin Club Exposed

Nexo Says Takeover of Crypto Lender Vauld Still On As Deadline Approaches: Report

Nexo Says Takeover of Crypto Lender Vauld Still On As Deadline Approaches: Report

Nexo is reportedly still planning on finding a suitable agreement in negotiations to take over crypto lender Vauld. According to a report from Bloomberg, talks between Nexo and Vauld are currently at an impasse as Vauld’s January 20 deadline to present a restructuring plan to creditors approaches. Nexo began negotiations with Vauld in July 2022 amid […]

The post Nexo Says Takeover of Crypto Lender Vauld Still On As Deadline Approaches: Report appeared first on The Daily Hodl.

FBI Cracks $290M Crypto Scam—Trade Coin Club Exposed

Crypto Lender Nexo To Leave United States, Citing Lack of Regulatory Clarity

Crypto Lender Nexo To Leave United States, Citing Lack of Regulatory Clarity

Switzerland-based crypto lender Nexo is announcing plans to cease its business operations in the United States. The crypto lender says that the decision is influenced by the regulatory and policy landscape in the United States. Withdrawals will continue to be processed in “real-time,” according to Nexo. “Today we are announcing the regrettable but necessary decision […]

The post Crypto Lender Nexo To Leave United States, Citing Lack of Regulatory Clarity appeared first on The Daily Hodl.

FBI Cracks $290M Crypto Scam—Trade Coin Club Exposed

Proof-of-Reserves Concept Gains Traction as Major Crypto Exchanges Provide Wallet Lists and Promise Full Audits

Proof-of-Reserves Concept Gains Traction as Major Crypto Exchanges Provide Wallet Lists and Promise Full AuditsWhen it was first discovered that FTX might be insolvent, a large slew of crypto exchange executives said that they aimed to provide proof-of-reserves audits. While exchanges like Binance and Crypto.com have provided wallet addresses tied to company wallets, blockchain analytics firm Nansen has detailed the company is in the midst of creating a display […]

FBI Cracks $290M Crypto Scam—Trade Coin Club Exposed

Nexo dodges $219M bullet just days before FTX’s solvency crisis

The firm withdrew its remaining balance from FTX at the 11th hour and topped weekly fund outflows from the troubled exchange.

According to a Nov. 8 tweet, crypto lender Nexo currently has net zero exposure to the ongoing crisis embroiling cryptocurrency exchange FTX and crypto trading firm Alameda Research. Nexo also explained that it withdrew its entire balance of funds from FTX within “the past few days.”

Alex Svanevik, CEO of blockchain analytics platform Nansen, confirmed the story, providing data showing that Nexo withdrew over $219 million from FTX between Nov. 1 and Nov. 8. This also ranks Nexo as the top entity for funds outflow in the past week.

The firm appears to have dodged a major bullet, as on Nov. 8, FTX announced that it would halt all non-fiat consumer withdrawals. Continuing with its assessment of the situation, Nexo said that it had a small loan to Alameda Research representing less than 0.5% of its assets. The loan was fully collateralized by digital assets, which Nexo said were sold on Nov. 6. According to the firm, the trade resulted in “100% principal recovery and $0 losses for the company.”

Nexo has thus far sidestepped major industrywide risk events this year, including the collapse of Terra, hedge fund Three Arrows Capital and crypto lender Celsius. According to a real-time audit of the firm’s custodied assets, Nexo currently has more than $3.4 billion in consumer liabilities, with a collateralization ratio of more than 100%, making them fully backed by Nexo’s assets. The numbers are attested by United States accounting firm Armanino LLP, which is an auditor certified by the Public Company Accounting Oversight Board.

FBI Cracks $290M Crypto Scam—Trade Coin Club Exposed

Insolvency not in ‘Nexo’s reality,’ says co-founder during AMA

Co-founder Kalin Metodiev stated that comparisons between Celsius, Voyager and Nexo are “very far from reality” and that the firm is focused on building in a sustainable way.

Bankruptcy or insolvency is not in “Nexo’s reality” according to the crypto lending platform’s co-founder and managing partner, Kalin Metodiev.

In an Ask Me Anything (AMA) video posted via YouTube on Oct. 4, founders and managing partners Metodiev and Antoni Trenchev addressed community questions and recent FUD-related rumors that Nexo could soon face insolvency issues.

Responding to a question about the insolvency/bankruptcy rumors and whether Nexo will be the “next Celsius and Voyager,” Metodiev explicitly stated that:

“Insolvency, bankruptcy are nowhere in Nexo’s reality, and we believe, we hope, we aspire, [and] we[‘re] work[ing] very hard to deliver a very strong and sustainable future for our users.”

“Finding resemblances with these two names [Celsius and Voyager] or other names in the space, is very far from reality and I think this is very easily verifiable,” he added.

Adding to Metodiev’s comments, Trenchev noted: “that I didn’t want to mention [any] names but I'm going to mention a few names; you know, no exposure to the Terra (LUNA) debacle, absolutely no lending to Three Arrows Capital.”

“In the two names that were mentioned in the question, in the bankruptcy filings you can see the creditors list, Nexo is not on that,” he said.

The rumors appear to have originated in part, from a claim in a Sept. 26 cease and desist order from the Kentucky Department of Financial Institutions that Nexo’s “liabilities would exceed its assets” if its Nexo (NEXO) token holdings were excluded from the equation. This is just one of several cease and desist orders filed against Nexo.

Market analysts such as Dirty Bubble Media author Mike Burgersburg previously alleged that Nexo is facing insolvency risks because it holds the vast majority of NEXO’s token supply on its platform, similar to Celsius which owned more than 50% of its native token, CEL.

In line with such thinking, a sharp decline in the price of NEXO could significantly impact the company, he alleged. 

However, a Nexo spokesperson promptly denied the allegations to Cointelegraph, stating that the data they provided to Kentucky regulators was for one of the Nexo Group’s entities, and that “NEXO tokens represent less than 10% of the company’s total assets.”

In the AMA, the Nexo founders also addressed a question relating to the firm’s recent attestation, which indicated that Nexo’s $3.7 billion worth of customer liabilities are 100% collateralized but doesn’t provide any further details than that.

Related: Nexo ‘surprised’ by state regulators’ actions, says co-founder

Asked whether the firm plans to “include a breakdown of assets within the attestation rather than just a total dollar figure?” Metodiev outlined that Nexo will provide greater transparency, but didn’t outline what that will entail as he suggested the company also needs to balance the need for privacy to stave off competition.

“The more transparency we can provide that will be helpful to our community, to our users, to decision makers for investment purposes. We would continue increasing this transparency, but making sure that this transparency, first of all, doesn't diminish our competitive edge.”

“I think you know that while we commit and will continue increasing the transparency, it needs to be done with the proper degree of duty and responsibility to make sure that this transparency is constructive and beneficial for decision making purposes,” he added.

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Wrapped Bitcoin Locked on MakerDAO Falls to 2022 Low After Nexo Withdraws Massive Amount of WBTC: Santiment

Wrapped Bitcoin Locked on MakerDAO Falls to 2022 Low After Nexo Withdraws Massive Amount of WBTC: Santiment

Blockchain analytics firm Santiment says that crypto lender Nexo has pulled a huge portion of Wrapped Bitcoin (WBTC) off of decentralized finance (DeFi) platform MakerDAO following the firm’s legal troubles with multiple state regulators. Santiment says that Nexo’s big withdrawal from MakerDAO has taken nearly half of all the WBTC off of the platform and […]

The post Wrapped Bitcoin Locked on MakerDAO Falls to 2022 Low After Nexo Withdraws Massive Amount of WBTC: Santiment appeared first on The Daily Hodl.

FBI Cracks $290M Crypto Scam—Trade Coin Club Exposed