Troubled cryptocurrency firm Nexo plans to sue the Bulgarian government after large-scale raids on the company’s Sofia offices.
The Bulgarian News Agency reported on January 13 that Nexo had complained about the actions of law enforcement authorities in response to the investigation against the company.
The company is reportedly preparing to file a lawsuit against the authorities to claim damages caused by the sudden police outage. One report indicated that investigators did not present a search warrant for hours, while the inspectors did not identify themselves.
Nexo believes that the raids on its offices yesterday were against the law and demonstrated the “incompetence of those who carried out this shameful act”. Nexo has also described the actions against the company as “domestic bulgarian arbitrariness”, which allegedly aims to “destroy and pillage a thriving company”.
The company also confirmed that Nexo does not provide any services to Bulgarian residents due to possible problems with the local government. The company also reiterated that it was in compliance with anti-money laundering requirements and sanctions against Russia, as well as cooperating with major crypto intelligence firms such as Chainalysis.
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The company expressed confidence that it would win the lawsuit, which would award Nexo compensation for the damage caused by the investigation, saying: “The compensation that Bulgaria will pay after the claims are submitted and won by Nexo will be another record amount of hundreds of millions, but, unfortunately, they will be at the expense of the Bulgarian taxpayer “.
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More than 300 police officers, prosecutors and national security personnel have been involved in the investigation against Nexo, said Sika Mileva, a spokeswoman for Bulgaria’s chief public prosecutor. It also noted that the investigation is currently confined to Bulgaria, with local police officers searching 15 addresses related to Nexo as of January 12. Other reports indicated that some foreign agencies were also involved in the investigation.
Sika Mileva and a Bulgarian cybersecurity officer. Source: Bulgarian News Agency
Nexo’s statement came shortly after the company was hit by a massive outflow amid reports of an investigation.
According to crypto analytics platform Arkham Intelligence, Nexo has seen “floods of outflows” since the news broke. Blockchain tracker Cielo Finance also reported large withdrawals from Nexo, highlighting transactions of more than $200,000 in coins.
Leaving the platform on January 12th.
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But a Nexo spokesperson denied any abnormal flows to Cointelegraph. “The current outflows on the platform that we see are normal, given the overall market conditions,” said a Nexo representative. The spokesperson added that the outflows represent 2% of Nexo’s total $2.3 billion in assets under management.