- Bulgarian legislation does not apply to any services involving crypto assets
- The defendants were accused of participating in an organized crime group
The Prosecutor’s Office of the Republic of Bulgaria has closed its investigation into the affairs of crypto platform Nexo due to lack of evidence of a crime, Bulgarian state news agency BTA reported. The allegations date back to 2018, when the platform was launched by defendants Kosta Kanchev, Antoni Trenchev, Kalin Metodiev and Trayan Nikolov.
Crypto is not legal tender in Bulgaria
In 2018 and at the present time, the Bulgarian legislation did and does not apply to any services involving crypto assets. Cryptocurrency is not regulated in the EU country and the firms in the Nexo circle were and are not subject to any licensing or registration laws. Virtual currency and related activities do not fall within the scope of laws on payment services and systems.
Serious accusations
The defendants were accused of participating in an organized crime group from 2018 to January 2023. Trenchev and Kanchev were also accused of carrying out illegal financial transactions through their accounts on Nexo in the same period.
They provided loans and accepted deposits in US dollars, pounds and euros to companies and individuals and charged interest. According to witness testimonies, Nexo’s activities were carried out through a platform outside Bulgaria.
The prosecution found no evidence of criminal activity, including carrying out illegal financial transactions, computer fraud, tax offences, and money laundering. The Nexo token has been gaining value since this spring and is now approaching $0.90 per token according to data from CoinGecko.
Nexo products are not financial instruments
According to the prosecution, Nexo’s products did not constitute financial instruments. Their services did not constitute investment services as cryptocurrency trading is not subject to regulation in Bulgaria.
The prosecutors in charge of the investigation have closed it, concluding that no crime has been committed.
Unlike the notoriously ineffective Bulgarian authorities, their US counterparts were swift to move against the platform. In January 2023, the US Securities and Exchange Commission (SEC) charged Nexo with violating federal securities laws and slapped it with a $45 million fine. Nexo did not appeal the fine.
