The Prosecutor's Office announced Friday that it has closed the "Nexo" investigation due to lack of crime. The reasons for the decision state that as of 2018, and at the present time, there is no relevant legal regime of the activity related to services with crypto assets. It is not regulated and the companies of the "Nexo" group are not subject to permitting, registration or licensing regimes. Virtual currency is not regulated in the country as legal tender and its activities do not fall within the classification under the law on payment services and systems.
During the investigation, four persons have been charged as defendants - Kosta Kanchev, Antoni Trenchev, Kalin Metodiev and Trayan Nikolov. The charges are that in the period from 2018 to January 2023, the four participated in an organized criminal group established for a self-serving purpose.
Kanchev and Trenchev are also accused of having carried out banking transactions on their own account through the online platform "Nexo" between June 2018 and January 2023, without authorisation under the Credit Institutions Act. They engaged in lending and deposit-taking by providing cash loans in US dollars, British pounds and euros to individuals and commercial companies in return for interest, as well as deposits against payment of interest.
It is established from the testimony of witnesses that virtual currencies are not regulated in the territory of the Republic of Bulgaria. According to a 2019 report by the European Banking Authority (EBA), cryptoassets are not recognised as currency, deposits or other repayable funds in any EU country.
The analysis of the witnesses interviewed in the case also revealed that the activities of "Nexo" were carried out through an online platform, probably operated outside the country.
There is no evidence of criminal activity in various forms of complicity for the purpose of carrying out banking activities for hire without appropriate authorisation. There was also no evidence of money laundering. No evidence of tax offences or computer fraud was found against the defendants, either.
According to the prosecution service, the products offered by “Nexo” do not constitute financial instruments. The provision of services to clients in respect of these products does not fall within the scope of investment services. Given that crypto assets are currently not financial instruments, trading in them is also not subject to regulation.
The supervising prosecutors have concluded that no crime has been committed and have discontinued the criminal proceedings.
/VE/
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