Antoni Trenchev, co-founder of the Nexo cryptocurrency lending platform, said the company could sue the Bulgarian government for more than $1 billion for breaking into its offices and undermining its reputation.
He also denied rumors that members of the entity run an organized criminal group, and commit money laundering and terrorist financing operations.
‘We will defend our interests’
The confrontation between Nexo and the Bulgarian authorities intensified after Trenchev swore to take the dispute to court:
“Our consultants estimate the damage at more than a billion dollars. We were in the process of listing on the American stock exchange, and now it has to be postponed due to the reputational damage done to us.” – he explained.
The executive claimed the actions of Bulgarian prosecutors to Raid the offices in the capital, Sofia, were “absurd, unnecessary and largely illegal”.
The Nexus Scandal it happened just a day before President Rumen Radev was about to give the third and final term to form an interim government. Some assumed that Democratic Bulgaria (a centre-right political party that has vowed to tackle corruption and enforce various judicial reforms) had the best chance of receiving the mandate.
However, it was revealed that more than a dozen Nexo employees had previously made significant donations to the aforementioned party, which could have affected the president’s decision. He finally gave the mandate to the Bulgarian Socialist Party (BSP).
Trenchev agreed with the assumption that the raid on Nexo’s offices on that very day was a public relations move orchestrated by the prosecution. He also admitted to knowing the leader of Democratic Bulgaria, Hristo Ivanov:
“I know Hristo Ivanov. I was part of public life in Bulgaria years ago. But I don’t see how that’s relevant. We are a handful of people in Bulgaria.”
The head of Nexo said that people are free to donate and he sees nothing wrong with those who donated funds to Democratic Bulgaria as they have registered publicly and reported everything to the Audit Office.
Despite the confrontation, Trenchev assured that the crypto lender still has a strong base of five million customers and processes millions of transactions every day.
Pay $45 million to the US
Aside from its problems in Bulgaria, Nexo recently agreed pay $45 million in fines to the US SEC and NASAA over allegations that it offered cryptocurrency lending products without complying with necessary regulations. Gary Gensler, Chairman of the SEC, commented as follows:
We accuse Nexo of failing to register its retail crypto lending product before offering it to the public, bypassing essential disclosure requirements designed to protect investors. Compliance with our time-tested public policies is not an option.
When crypto companies fail to comply, we will continue to follow the facts and the law to hold them accountable. In this case, among other actions, Nexo will stop offering its unregistered loan product to all US investors.”
Nexo confirmed the fines and said they are pleased to have entered into a “constructive dialogue” with the watchdog and resolved all issues.
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