Nexo, a London-based crypto lender, has shut down two of its subsidiaries in the UK. The closure comes amid ongoing investigations into the company’s alleged involvement in an organized crime scheme in Bulgaria. The lender is reportedly under investigation by Bulgarian authorities, who have charged four individuals working at Nexo for money laundering, unlicensed banking activities, and tax and computer crimes.
Nexo’s co-founder, Antoni Trenchev, stated that the closure of the subsidiaries was due to a company-wide “restructuring.” Trenchev also noted that the company is “rethinking the way” it goes about “servicing clients” but is not considering exiting the UK market.
This is not the first legal dispute that Nexo has faced. In June 2020, the US Securities and Exchange Commission (SEC) charged Nexo a $22.5 million penalty for failing to register its retail lending product. In January, Nexo settled with the SEC by paying $45 million in fines.
Nexo is among the growing number of fintech companies that have emerged in recent years to offer cryptocurrency lending services. As the use of cryptocurrencies continues to gain popularity, regulators are stepping up efforts to ensure that these companies comply with existing laws and regulations.
The closure of Nexo’s subsidiaries in the UK is likely to have a significant impact on the company’s operations. It remains to be seen how Nexo will respond to the ongoing investigations and legal disputes it faces, and how these will impact the wider cryptocurrency lending industry.
