The crypto lending firm, Nexo is making efforts to disband two of its subsidiaries in the United Kingdom. The units are Nexo Financial Services Limited and Nexo Clearing, according to a regulatory filing with the UK Companies House seen by Bloomberg.
However, Antoni Trenchev, Nexo's Co-Founder, told the outlet that the firm is not planning to exit European countries. Instead, the firm says it is conducting “some restructuring” and “rethinking” the way it delivers its services to clients.
Nexo Battles Prosecution in Bulgaria
The new development comes amidst Nexo’s legal battle in Bulgaria. In January, Bulgarian prosecutors launched a probe against Nexo over alleged anti-money laundering (AML) failure and violation of sanctions against Russia.
As part of the probe, Bulgaria’s local investigators in collaboration with foreign agents raided Nexo’s Bulgarian offices with a total of 15 offices checked. In addition, Prosecutors alleged that one of Nexo’s clients is a person linked to financial terrorism.
Local media reported that Siika Mileva, Bulgaria’s Prosecutor General, through a spokesperson, alleged that Nexo Co-Founders, who are Bulgarians, ran shell companies. Mileva noted that Nexo processed over €94 billion in the last five years.
However, reacting to the news, Nexo in a lengthy Twitter post accused the prosecutors of adopting “the kick first, ask questions later approach." The firm noted that it had rejected a lot of business opportunities as it never compromises with its very stringent AML and know-your-customer policies.
“Despite being fully automated, Nexo has 30+ AML compliance officers who ensure that we retain a real-time picture of our clients, which includes adverse media publications, OFAC sanctions lists, and a source & flow of funds, etc.,” Nexo explained.
Over the years, we have turned down a lot of business because Nexo never makes compromises with regard to our very stringent anti-money laundering and know-your-customer policies. But we have always known that this is how you build a sustainable business. 1/
— Nexo (@Nexo) January 12, 2023
Nexo Settles with US Watchdogs
Meanwhile, in the United States, Nexo recently paid $45 million as a penalty to the Securities and Exchange Commission (SEC) and other state regulators for offering and selling crypto which the SEC considers unregistered securities. The federal securities regulator got $22.5 million while the remainder went to state financial watchdogs.
In addition, the crypto lender paid an extra $1.5 million to the State of New York for services it offered through a virtual currency trading platform called Nexo Exchange.
Nexo has reached a final landmark resolution with the U.S. Securities and Exchange Commission (SEC), the North American Securities Administrators Association (NASAA), consisting of all 50 U.S. States & 3 territories and the Attorney General of New York.????https://t.co/modjbPsOdV
— Nexo (@Nexo) January 19, 2023
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This article was written by Solomon Oladipupo at www.financemagnates.com.
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