Key Takeaways
- Criminal proceedings against Nexo have been dropped due to insufficient evidence.
- The lack of specific legislation for crypto assets in Bulgaria played a crucial role in the case outcome.
- The termination of criminal proceedings underscores the importance of comprehensive crypto regulation.
In Bulgaria, crypto assets are not considered financial instruments and their trading does not fall under any current regulatory framework.
Now, the Sofia City Prosecutor’s Office in Bulgaria has officially ended criminal proceedings against the crypto lender, Nexo. This decision came after prosecutors determined that there was insufficient evidence to prove any criminal activity.
Sofia Prosecutor’s Office Drops Charges
The criminal proceedings against Nexo started on September 29 of the previous year. The investigation started on suspicions of money laundering and sanctions violations. However, the prosecutor’s office found no evidence of Nexo engaging in unlicensed banking activities, money laundering, tax crimes, or computer fraud.
The statement said:
“On the basis of the established factual situation, the team of supervising prosecutors came to the conclusion that there was no evidence of committed crimes.”
Key defendants in the case included K. Kanchev, A. Trenchev, K. Metodiev, and T. Nikolov, accused of forming an organized criminal group for profit from 2018 to January 2023. The investigation involved thorough methods, including witness interviews, account movement analyses, forensic reports, and various investigative actions like searches and seizures.
‘Crypto Is Not a Financial Instrument’
The legal status of cryptocurrencies played a crucial role in the case’s outcome. In Bulgaria, there is no specific legislation for services involving crypto assets, which means the activities conducted by Nexo are not subject to any regulatory requirements, including permits, registration, or licensing.
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The prosecutor’s office clarified that the services offered by Nexo are not considered financial instruments. Therefore, they do not fall under the category of investment services, nor are they regulated by existing financial regulations.
In Bulgaria, virtual currency is not recognized as a legal payment method and does not fit within the scope of the Law on Payment Services and Payment Systems.
This absence of specific regulations for crypto assets ultimately led to the decision that Nexo committed no crime, resulting in the termination of the criminal proceedings against them.
Teuta is a seasoned writer and editor with more than 15 years of experience. She has expertise in covering macroeconomics and technology as well as the cryptocurrency and blockchain industries. She has worked for several publications as a journalist and editor, including Forbes, Bloomberg, CoinTelegraph, Coin Rivet, CoinSpeaker, VRWorld and Arcane Bear.
Teuta began her professional career in 2005, working as a lifestyle writer at Cosmopolitan in Croatia. From there, she branched out to several other publications, covering mainly business and the economy. She then turned her attention to the world of cryptocurrency and blockchain, believing that crypto is among the most important inventions in the history of humanity. Her involvement in fintech began in 2014 and she has since lent her expertise in writing, editing and gathering information about the world of crypto, blockchain, NFTs and Web3.
An all-round news hound, mentor, editor, and writer, Teuta enjoys teamwork and good communication. She holds a WSET2 diploma and has a thing for chablis, punkrock music and shoes. She also holds a double MA in Political science and Entrepreneurship.
