Hideo Nakamura Bulgarian Prosecutors Clear Crypto Lender Nexo of Criminal Charges – No Proof of Wrongdoing
The prosecutor’s office in Sofia, Bulgaria’s capital city, has decided to dismiss criminal charges against the cryptocurrency lending platform Nexo. In an official statement, the authorities asserted that there was a lack of evidence to support any criminal activities. Notably, the authorities pointed out that cryptocurrency assets do not currently fall under the category of financial instruments and are not subject to regulatory oversight within the country.
Unregulated Crypto Trading in Bulgaria
On Friday, the Prosecutor’s Office of the Republic of Bulgaria disclosed that the criminal proceedings against Nexo, initiated on September 29 of the previous year, have been terminated by the Sofia City Prosecutor’s Office. These proceedings were initiated following allegations of money laundering and violations of sanctions, and they had been under scrutiny by law enforcement officials.
The official announcement, as translated by Google, stated, “There is no evidence of criminal activity” with regards to the company’s engagement in banking activities without the required authorization. It further explained, “Additionally, no evidence of money laundering was uncovered against the accused individuals, and there is no indication of tax infractions or computer fraud.” The prosecutor’s office provided the following statement:
Based on the established factual circumstances, the supervising prosecutors have concluded that no criminal acts have been committed.
The case involved several defendants, including K. Kanchev, A. Trenchev, K. Metodiev, and T. Nikolov. They were accused of being part of an organized criminal group operating for profit between 2018 and January 2023. Kanchev and Trenchev also faced charges related to conducting unauthorized banking transactions, which encompassed lending and deposit activities conducted in U.S. dollars, British pounds, and euros through the Nexo online platform.
The investigation encompassed witness interviews, examinations of payment account transactions, intricate forensic and assessment reports, as well as various investigative procedures such as searches and seizures. Remarkably, despite being authorized to allocate $500,000 for an expert, supervising prosecutors deemed it unnecessary.
The regulatory status of cryptocurrencies in Bulgaria played a pivotal role in shaping the prosecutors’ decision. Noting the absence of a specific legal framework governing crypto asset-related services in Bulgaria, the prosecutor’s office emphasized that Nexo’s activities remained unregulated, without the need for permits, registration, or licensing.
“It can be concluded that the products offered by Nexo are not financial instruments. The provision of services to clients regarding these products does not fall within the scope of investment services,” elaborated the prosecutor’s office. It further clarified:
Given that crypto assets are not presently classified as financial instruments, their trading remains beyond the scope of regulatory oversight.
Bulgaria does not legally recognize virtual currencies as a means of payment, and they are not categorized under Article 4 of the Law on Payment Services and Payment Systems, as clarified by the prosecutor’s office. Consequently, the supervising prosecutors determined that no criminal offenses had been committed and, accordingly, terminated the criminal proceedings.
Share your thoughts on the decision of Bulgarian prosecutors to drop the charges against the crypto lender Nexo in the comments section below.
Table Of Contents
Frequently Asked Questions (FAQs) about Crypto Lender Nexo Charges Dropped
What were the charges against Nexo in Bulgaria?
The charges against Nexo in Bulgaria included allegations of money laundering, violations of sanctions, and unauthorized banking transactions.
Why were the charges dropped?
The charges were dropped because the supervising prosecutors found no evidence of criminal activity. Additionally, the regulatory status of cryptocurrencies in Bulgaria played a role, as crypto assets were not considered financial instruments and were not subject to regulation.
Who were the individuals involved in the case?
Several individuals were named as defendants in the case, including K. Kanchev, A. Trenchev, K. Metodiev, and T. Nikolov. They were accused of being part of an organized criminal group formed for profit.
What actions were taken during the investigation?
The investigation involved witness interviews, analysis of payment account movements, forensic and evaluation reports, and various investigative actions such as searches and seizures. However, despite the authorization to spend $500,000 on an expert, supervising prosecutors deemed it unnecessary.
How does the regulatory status of cryptocurrencies in Bulgaria affect the case?
The lack of a specific legal framework for crypto asset-related services in Bulgaria meant that Nexo’s activities were unregulated. As a result, there was no requirement for permits, registration, or licensing. The prosecutor’s office concluded that crypto assets were not financial instruments, and their trading was not subject to regulation.
What is the current legal status of virtual currency in Bulgaria?
Virtual currency is not recognized as a legal means of payment in Bulgaria, and it is not classified under Article 4 of the Law on Payment Services and Payment Systems.
What is the significance of this case for the crypto lending industry in Bulgaria?
This case highlights the need for regulatory clarity in Bulgaria regarding cryptocurrency-related services. The decision to drop charges against Nexo indicates that, at present, such activities are not subject to specific regulation in the country.
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