- Another crypto company gets caught in the political fire.
- Nexo is under investigation for money laundering schemes.
- Nexo vows to sue for false accusations.
Crypto lending company Nexo has unfortunately triggered a massive verbal fight between leading political parties in Bulgaria. The crypto platform, unfortunately, started the year on a rough note after authorities raided their local offices during a probe into suspected tax crimes and money laundering schemes.
The investigation immediately became a hot topic in the Eastern European country, and the leading political parties quickly took it as a chance to hurt each other’s reputations. A PM of the nation between 2009 and 2021, Boiko Borisov, and other members of his party claimed that five employees of the Nexo platform paid 20,000 BGN each to their opposition, Democratic Bulgaria, in October 2021. It was also disclosed that two more crypto lending platform workers had followed suit by giving away the same amount a few days later.
The GERB party went further to vow that they would investigate to see if Nexo had any part in financing the political campaign of “We Continue the Change,” which is the party that had won the elections in 2021 and stayed at the helm till June of last year, the organization of the former PM even went further to claim that the former finance minister Asen Vasilev was also part of Nexo’s inner party and supposedly acted on behalf of the company.
Asen Vasilev said last year that the government was looking towards exploring options of embracing a crypto payment mechanism in the short to medium term and revealed that the ruling party would partner up with the country’s central bank and other important industry players for the creation. Still, he did not mention Nexo at the time.
However, the opposing party was quick to refuse these claims saying that the allegations were the GERB PR actions against them. MP Kalina Konstantinova believes that the prosecution decided to launch the investigation at the exact time that the current President Rumen Radev was about to give Democratic Bulgaria (a close ally of the We continue the change) a new mandate to form a government that would have left GERB out of the equation, so for Nexo, the crypto company is unfortunately caught in a bad situation due to an alleged relationship with members of a political party in Bulgaria.
This wouldn’t be the first time politics and cryptocurrency have mixed, so it is not entirely surprising that Nexo is being dragged into this. The most recent case of cryptocurrency and politics mixing and making it to the limelight was the FTX case when it was revealed that the former CEO of the crypto exchange, Sam Bankman-fried, had donated to political campaigns with company funds. It had caused controversy, especially after the company went bankrupt due to his extravagant lifestyle funded by company funds.
The political parties he donated to were urged to return the donations they had gotten in a bid for FTX to pay up its debts, but regardless, they were already in the news for their ties to the crypto exchange. Nexo is no different. Regardless of the truth of their relationship with the political party in Bulgaria, they are already caught in the limelight due to any previous dealings they may have had with the opposing political party. However, if the investigation goes smoothly and Nexo is proven innocent, the crypto platform can be unscathed.
The Former Finance minister of Bulgaria refused all rumors of a close relationship with Nexo and any speculations of their campaign being backed by the platform. Asen Vasilev described the situation with Nexo as a prominent media smoke created by the opposing party and said that the accused executives of the cryptocurrency company had every right to sue Bulgaria for involving them in a political dispute ruining their reputation.
Nexo also claimed that the actions of the prosecution office were against the law and announced their intentions to take the case to court. The company also stated that it had complied with all the country’s anti-money laundering policies, so the accusations and investigations were unfounded.
Conclusion
This may not be the last time a crypto company will get caught in the crossfire between political parties, primarily as more countries work towards legalizing crypto and creating regulations to guide it, there will be more cases of crypto being used as a tool for political fights between opposing parties, especially if crypto gets thoroughly inducted into the financial system of more countries.
