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Antoni Trenchev, co-founder of cryptocurrency lending platform Nexo, said the company could sue the Bulgarian government for over a billion dollars for having raided its offices and sapped its reputation.
He also refuted the rumors that members of the entity run an organized criminal group, and commit money laundering and terrorist financing operations.
‘We'll take care of ourselves
The clash between Nexo and the Bulgarian authorities escalated after Trenchev vowed to take the dispute to court:
“Our consultants estimate the damages at over $1 billion. We were in the process of listing on the American stock exchange, and now it has to be postponed because of the reputational damage that was done to us.” – he explained.
The executive claimed the actions of the Bulgarian prosecutors to raid the offices in the capital Sofia were “absurd, unnecessary, and a large part of them – illegal.”
The Nexo scandal happened just a day before President Rumen Radev was about to give the third and final mandate to form an acting government. Some have assumed that democratic Bulgaria (a centre-right political party that is committed to tackling corruption and implementing a number of judicial reforms) has the best chance of receiving the mandate.
However, it was revealed that over a dozen new staff had already made substantial donations to the aforementioned party, which could have influenced the President's decision. In the end, the Bulgarian Socialist Party (bsp) was given the mandate.
Trenchev agreed with the hypothesis that the search of Nexo's offices on that very day was an orchestrated pursuit movement. He also admitted knowing the leader of Democratic Bulgaria – Hristo Ivanov:
“I know Hristo Ivanov. I participated in Bulgarian public life years ago. But I don't see the relevance of that. We are a handful of people in Bulgaria.”
Nexo’s boss said people are free to make donations and sees nothing wrong with those that gave away funds to Democratic Bulgaria since they have publicly registered and reported everything to the Audit Office.
Despite the confrontation, trenchev has assured that the crypto lender still has a solid base of five million clients and processes millions of transactions every day.
Paying $45 Million to the US
Apart from its issues in Bulgaria, Nexo recently agreed to pay $45 million in penalties to the US SEC and the NASAA over allegations that it offered crypto lending products without complying with the necessary regulations. Gary Gensler, SEC's President:
"We have accused Nexo of failing to register its retail crypto loan product before making it available to the public, by circumventing critical disclosure requirements designed to protect investors. Respect our tried and true public policies is not an option.
When crypto companies fail to comply, we will continue to monitor the facts and the law to hold them to account. In this case, among other measures, Nexo terminates its non-registered loan proceeds as it does for all American investors."
Nexo confirmed the fines, stating that they are happy to have engaged in a "constructive dialogue" with the watchdog and resolved any problems.
