Bulgarian prosecutors drop charges against Nexo execs, citing no evidence of criminal activity

The Prosecutor's Office of the Republic of Bulgaria has dropped criminal charges against four individuals linked to cryptocurrency lender Nexo.

In a Dec. 22 announcement, the prosecutor's office concluded that there was “no evidence of crimes” against four Bulgarian nationals charged following the January raid on Nexo's offices. Authorities said there was no evidence of money laundering, tax crimes or computer fraud that would constitute an organized crime group.

The individuals charged following the Nexon raid are Kosta Kanchev, Antony Trenchev, Triyan Nikolov and Kalin Metodiev. Prosecutors alleged in January that Nexo executives were involved in an organized crime group with the intention of obtaining crypto loans from 2018 to 2023, but in a December 22 announcement, they said Bulgaria does not have a legal regime covering crypto assets.

‘[T]”The products offered by Nexo are not financial instruments,” the prosecutor's office said. Services provided to clients in relation to these products do not fall within the scope of investment services. While crypto-assets are not currently financial instruments, their trading is not subject to regulation.

As part of the investigation, prosecutors said Nexo's operations were “probably managed offshore,” the platform said in its threat to file a lawsuit. Although Nexo has offices in the UK, Bulgaria and Switzerland, it says it does not offer services to Bulgarian residents.

“The fact that the Bulgarian Prosecutor's Office has dropped all charges against Nexo and its executives confirms that no crimes were committed and shows unequivocally that the entire attack on Nexo was political,” Trenchev said. .

Related: Bulgarian prosecutors say Nexo investigation is not political

Following the January raid, Nexo agreed to a $45 million settlement with the U.S. Securities and Exchange Commission and the North American Securities Administrators Association not to register the offering and sale of its interest products — an agreement that settled several U.S. cases. State securities regulators. The platform shut down production in April.

The settlement with US regulators follows Nexo's announcement in December that the lender plans to wind down operations in the country. The company said there is a “lack of regulatory transparency” in the United States, making the decision to leave “regrettable but necessary”.

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Update (December 22 at 8:45 PM UTC): This article has been updated to include a statement from Nexo.