Troubled cryptocurrency company Nexo plans to sue the Bulgarian government following mass raids on the company’s offices in Sofia.
Nexo has complained about the actions of law enforcement in response to the investigation against the company, the Bulgarian News Agency reported on 13 January.
Apparently, the company is preparing to file a lawsuit against the authorities to claim compensation for damages caused by the sudden police interruption. A report suggests that investigators did not provide a search warrant for hours, while the inspectors never identified themselves.
Nexo considers that the raids carried out yesterday in its offices were contrary to the law and demonstrated “the total incompetence of those who carried out this shameful action.” Nexo also described the actions against the firm as “local Bulgarian arbitrariness” that allegedly aimed to “destroy and loot a thriving business.”
The firm also stressed that Nexo does not offer any services to Bulgarian residents due to potential issues with the local government.. The company also reiterated that it has complied with anti-money laundering requirements, as well as sanctions against Russia, as well as cooperating with major crypto intelligence firms like Chainalysis.
The firm expressed confidence that it will win the lawsuit, which will award Nexo compensation for damages caused by the investigation, stating:
“The compensation Bulgaria will pay after Nexo files and wins the lawsuits will be another record amount of hundreds of millions, but unfortunately it will be at the expense of the Bulgarian taxpayer.”
Siyka Mileva, a spokeswoman for Bulgaria’s chief prosecutors, said the investigation against Nexo involved more than 300 police officers, prosecutors and national security agents. He also noted that the investigation is currently limited to Bulgaria, with local police officers searching 15 Nexo-related addresses as of January 12.. Other reports indicated that some foreign agencies were also involved in the investigation.
Nexo’s statement came shortly after the company experienced mass departures amid reports of the investigation.
According to cryptocurrency analytics platform Arkham Intelligence, Nexo has viewed “floods of departures” since the news broke. The Cielo Finance blockchain tracker also reported about large withdrawals from Nexo, highlighting transactions with more than 200,000 USD Coin (USDC) stablecoin leaving the platform on January 12.
Nevertheless, A Nexo spokesperson denied any abnormal output to Cointelegraph. “The current exits on the platform that we are seeing are normal, taking into account general market conditions,” the Nexo representative said.. The spokesperson added that the outflows have accounted for 2% of the total assets managed by Nexo, which amount to USD 2.3 billion.
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