The Prosecutor’s Office of the Republic of Bulgaria has halted criminal proceedings against four individuals connected to Nexo, a cryptocurrency lending firm. In a notice issued on December 22, the office stated that it found no evidence of criminal activity among the four Bulgarian nationals implicated following a January raid on Nexo's offices. The authorities had initially suspected them of involvement in money laundering, tax evasion, and computer fraud as part of an organized crime group.
The individuals charged in the aftermath of the Nexo incident were Kosta Kanchev, Antoni Trenchev, Trayan Nikolov, and Kalin Metodiev. In January, Bulgarian prosecutors alleged that Nexo executives were part of an organized crime group operating from 2018 to 2023, with the aim of deriving illicit profits from cryptocurrency lending. However, a statement on December 22 clarified that Bulgaria’s legal framework does not currently encompass crypto assets, leading to the dismissal of the charges.
The prosecutor's office clarified that the products offered by Nexo are not classified as financial instruments under Bulgarian law. Therefore, services related to these products do not constitute investment services. This lack of regulation in the trading of crypto-assets was a key factor in the decision. Additionally, the investigation revealed that Nexo's operations might have been managed from outside Bulgaria, aligning with the company's assertion, made during its threat to initiate legal action. Nexo, which has offices in the UK, Bulgaria, and Switzerland, maintains that it does not offer services to Bulgarian residents.
Antoni Trenchev, commenting on the decision, stated that the Bulgarian Prosecutor’s Office dropped all charges against Nexo and its executives, confirming the absence of any criminal actions. He emphasized that this vindication indicates that the initial charges were politically motivated and unfounded. Following the January raid, Nexo agreed to a $45 million settlement with the SEC and the North American Securities Administrators Association in the U.S., resolving multiple cases concerning the unregistered offering and sale of its interest-earning products.
Before reaching an agreement with U.S. regulators, Nexo announced in December its intention to cease operations in the United States. The decision to exit the U.S. market was described as regrettable but necessary, attributed to the absence of definitive regulatory guidelines in the country.
