End of the Nexo saga: The Bulgarian prosecutor's office ingloriously closed the investigation

The Bulgarian state prosecutor's office closed investigative proceedings in the so-called "Nexo case" after finding no evidence of crimes. The news comes less than a year after the highly publicized action against the crypto trading platform, when the police raided its offices in Sofia.

In January, the state prosecution described the Bulgarian-founded global company Nexo as a "pyramid of hollow companies with criminal clients". It said the investigation was "unique in the world", and that it was part of a large-scale international operation, implicating even Hamas. The prosecutor's office described it as the second largest economic criminal case after the bankruptcy of KTB bank. Yet, 11 months later, the Bulgarian prosecution stated that it had not found any evidence of crimes committed.

Nexo, for its part, accused the prosecutor's office of "unnecessarily ostentatious action" and "arbitrariness" and in response threatened the Bulgarian state with legal claims for hundreds of millions of levs.

The founders of Nexo, Kosta Kanchev and Antoni Trenchev, as well as company managers Kalin Metodiev and Trayan Nikolov, were brought in as defendants. They were accused of participating in an organized criminal group between 2018 and January 2023, including money laundering, tax offences and providing banking services without the necessary license, in addition to computer fraud.

In the course of the investigation, a number of witnesses were questioned, including people with classified identities. Two expert reports were prepared - technical and banking - plus, movements in payment accounts of individuals and legal entities were examined and analyzed. Likewise, there was a complex forensic and art evaluation expert report, a complex audiovisual and forensic-economic expert report, as well as various procedural-investigative actions, such as searches, seizures and inspections of material evidence. European Investigation Orders were drawn up and the responses to these were included in the case file.

From the testimony of witnesses, it is established that virtual currencies are not regulated in the territory of the Republic of Bulgaria," says a statement from the Sofia City Prosecutor's Office.

The state prosecution also referred to a thorough investigation in the US, where Nexo was subjected to strict controls. "According to those proceedings, Nexo had not engaged in fraud or misleading commercial practices, there is no evidence that Nexo customers were harmed or misled about the financial condition of the company," the prosecutor's office said.

Based on the factual situation, the team of supervising prosecutors came to the conclusion that there was no evidence of crimes committed. The facts considered in this way do not determine the presence of a criminal association based on a structure and durability."

The Nexo case was notable in Bulgaria also because it once again brought to the fore the question of the political parties funding model, with accusations that it lacks accountability and provides hidden political protection when done in a non-transparent manner. These speculations arose around the revelation that the "Yes, Bulgaria" party (part of the "Democratic Bulgaria" political coalition) had been financed by employees of the crypto company.

Translated by Tzvetozar Vincent Iolov