Four charged in the case against crypto lender Nexo, witnesses seek protection

Four people have been charged in the pre-trial proceedings for the activities of the crypto lender Nexo, the Head of Bulgaria’s National Investigation Service Borislav Sarafov said on January 13.

They are accused of leading and participating in an organised criminal group established for the purpose of committing coordinated crimes in the country and abroad - money laundering, tax crimes, computer fraud and banking activities without a license. The penalties provided for under these charges are imprisonment for more than 3 years.

The group began its activities in early 2018 and has operated in Bulgaria, the UK, Northern Ireland, Switzerland and the Cayman Islands.

Two of the accused have been granted a bail of BGN 1 million each and the supervising prosecutor has given 10 days for the bail to be posted. The other two accused are circulated as wanted. There is no official evidence that they have left the country.

All the accused have been banned from leaving the country.

"There are indications that these persons have extremely large financial resources. They have expensive properties in Dubai, the Caribbean, the Bahamas and own yachts. In one of the homes searched, 35 paintings by famous artists such as Salvador Dali, Picasso and Matisse were found and seized, which will be handed over to the National Art Gallery," said the spokeswoman for the Prosecutor General Siyka Mileva.

A huge number of magnetic media were seized in yesterday's raid and are currently being examined. Seventeen sites - offices and residential homes - were searched.

20 people were interviewed. Some of them anonymously. Some of the witnesses interviewed have expressed concerns for their safety and will be included in the witness protection programme, Sarafov added.

It has been established that some of the transactions were directed to Muhammed Mahmoud Ayesh, considered by the Israeli secret services to be involved with a Palestinian terrorist group, said Svetoslav Vassilev, head of the Cyber Crimes Unit at the National Investigation Service.

There is also evidence that sanctions imposed on companies based in Russian Federation have been breached.

Transactions worth more than $94 billion were made - from external addresses to Nexo and from Nexo to external companies.

The Prosecutor’s office has testimony that representatives of the crypto lender Nexo participated in a meeting at the Ministry of Finance with other companies involved in cryptocurrency. The meeting took place about six months ago, spokesperson Siyka Mileva said.

The purpose of the meeting was to discuss possible options for the implementation of cryptocurrency in the BORICA system (the company that provides and operates the technology infrastructure of the Bulgarian payment industry).

According to Mileva, the Nexo investigation is second only to the Corporate Commercial Bank case in terms of its size.

"The Nexo case is unique globally. It illustrates the new types of challenges facing the security system," said Prosecutor General Ivan Geshev.

Geshev described the action against Nexo as an example of good cooperation with European and Euro-Atlantic partners.

The case has been worked on for months by SANS, the Prosecutor's office and the National Investigation Service. The use of expert assistance is likely to be necessary.

"Such an act, such a large-scale investigation, cannot be conducted alone. But the credibility that the Bulgarian Prosecutor's office has built is such that we have taken on the onerous role of being the vanguard against these perpetrators of such acts. We are clearly aware of the great financial and intellectual resources we are up against," said Borislav Sarafov, Head of the National Investigation Service.

Nexo crypto lender investigated for alleged large-scale financial fraud - chronology