11 ms·

Bulgarian law enforcement raids offices of cryptocurrency firm Nexo

167 points by gchokov 4y ago

danuker 4y ago
Yield products without a banking license, "proof that a Nexo client [...] was a person officially designated as financing terrorism". You'd think crypto exchanges would be more cautious, given the controversial nature of their business.
- pjc50 4y ago
  The whole business is full of one-way bets where you either escape with the money or go bankrupt/get arrested. I think they may have assumed that law enforcement in Bulgaria was not sophisticated enough to be interested in them.
  - phoronixrly 4y ago
    > I think they may have assumed that law enforcement in Bulgaria was not sophisticated enough to be interested in them. It's not. This was an international op or with foreign intelligence tips/pressure to act. BG law enforcement was at best oblivious, at worst -- on payroll.
- 323 4y ago
  > A report by public broadcaster Bulgarian National Television earlier in the day claimed that the investigation was also looking into breaches of international sanctions imposed on Russia. There are a lot of Russians which use Bulgaria as an EU base. The infamous BTC-e exchange was also in Bulgaria and operated by Russians, and engaged in wide-scale money laundering.
  - sofixa 4y ago
    In this case it's reportedly only Bulgarians: > Mileva said that the people under investigation were Bulgarian nationals and the company, which she repeatedly described as a “cryptobank”, was operating primarily from Bulgaria. However there are lots of very pro-Russia Bulgarians (hard to explain after everything that has happened, but still..), so your point generally stands.
    - dollylambda 4y ago
      > However there are lots of very pro-Russia Bulgarians (hard to explain after everything that has happened, but still..), Here is an excerpt from wiki which explains why some in Bulgaria are still "pro-russia": "The Western European Enlightenment in the 18th century influenced the initiation of a national awakening of Bulgaria.[63] It restored national consciousness and provided an ideological basis for the liberation struggle, resulting in the 1876 April Uprising. Up to 30,000 Bulgarians were killed as Ottoman authorities put down the rebellion. The massacres prompted the Great Powers to take action.[73] They convened the Constantinople Conference in 1876, but their decisions were rejected by the Ottomans. This allowed the Russian Empire to seek a military solution without risking confrontation with other Great Powers, as had happened in the Crimean War.[73] In 1877, Russia declared war on the Ottomans and defeated them with the help of Bulgarian rebels, particularly during the crucial Battle of Shipka Pass which secured Russian control over the main road to Constantinople"
      - lotsofpulp 4y ago
        I do not see why a Bulgarian today would assume Russia’s actions in 1877 have any relation to what Russia might do or be capable of in 2023.
        deleted 4y ago
        [deleted]
        bluetomcat 4y ago
        It's an irrational love-hate relationship which is essential to the history of the modern Bulgarian state and creates the internal political divisions between "rusophiles" and "rusophobes". As a young nation (in modern terms) that has never been through the Enlightenment, we don't have our own political and intellectual traditions, and much of politics is perceived as orbiting around a superpower, be it Russia, continental Europe, or the USA.
      - gostsamo 4y ago
        Your answer is only part of the truth. Though Russia had lots of welwishers in Bulgaria, the heavy indoctrination happened during the communist rule 1945-1989. Many people whose best years were during this period are still alive and many are disappointed by the failures of the post 1989 governments. The topic is complex and filled in with lots of propaganda, so I won't get into disputes, just giving additional context.
- aliqot 4y ago
  You'd think exchanges would stop being centralized and manned operations with addresses.
- bigbillheck 4y ago
  > You'd think crypto exchanges would be more cautious Only if you haven't learned anything from the history of crypto exchanges going at least as far back as MTGOX.
louwrentius 4y ago
> She said that investigators had proof that a Nexo client, who used the company’s platform to transfer cryptocurrencies, was a person officially designated as financing terrorism, but gave no further details. All crypto is some form of crime, money laundering, evading sanctions, funding terrorism, or just a ponzi scheme, it's just different sides of the same thing. I wish this space would totally collapse. Maybe if Tether (which is totally insolvent) collapses the whole space just dies. That would make the world a better place. Yes, it's true: the dollar or any other currency can be used for nefarious purposes as well, but that's why we have so much financial regulations and oversight (which should be better). And most of all, the upsides of regular currency (if you can call crypto a currency at all) is that it's the foundation of our societies. I just want to see all crypto die in a fire. The profound negative impact crypto has had on our world with zero benefits makes me so sad.
- mypastself 4y ago
  Is Bitcoin a Ponzi? How exactly?
  - lalaland1125 4y ago
    The only way to make money investing in Bitcoin is to convince a greater fool to buy your coins for more than you paid for them. And that greater fool must in turn convince an even greater fool, etc, etc It's not a Ponzi, but it has similar dynamics to a Ponzi in that you can only gain money through other people losing money.
    - krunck 4y ago
      Why does it have to be about making money? Bitcoin is a currency, not an investment. That's where a lot people get confused.
      - rubyist5eva 4y ago
        Bitcoin will never gain mass adoption as a currency, that leaves it as a "value store" - and the only people buying bitcoin are suckers buying bitcoin from others in the hope that they can in turn sell it to a bigger sucker down the line.
_xnmw 4y ago
I've noticed a recent spate of crackdowns on "hustlers" in the Eastern European space. See the recent takedown of Andrew Tate in Romania, for example, and now this.
- tokai 4y ago
  Maybe its like the Lenin statues. It's possible to get rid of them now while Russian strong men are busy.
- martythemaniak 4y ago
  Seeing Croatia make it into Schengen despite joining the EU 6 years later is quite embarrassing. There are large numbers of people in Romania and Bulgaria who are genuinely distressed that their countries are home to these unsavoury types and would like to put an end to it.
Kaizeras 4y ago
An ex-colleague of mine worked for OneCoin (another crypto scam originating from Bulgaria) when their offices got raided a few years ago. Now he’s an engineering manager at Nexo. I can see a pattern emerging in his career.
- unicornmama 4y ago
  A famous short seller, I think it was Chanos but I can't remember, once said in an interview that they follow where the management of past frauds go as a signal to determine future frauds.
  - ErikAugust 4y ago
    I may start a hedge fund based on this alone.
- dmos62 4y ago
  Disruptive product-oriented technologist, with a mind for optimizing customer-business needs.
  - sandworm101 4y ago
    Shady. Willing to be paid in strange currencies deposited in overseas banks. Likely to have tax troubles one day. Knows how to buy a plane ticket using cash. Strong opinions on Krugerrand valuation. Owns a motorcycle without an odometer. Bought a house with a series of 9,999$ travelers checks. More likely to install a Kim Dotcom-type panic room than run for public office.
    - Consultant32452 4y ago
      Where do I sign up?
      - luckylion 4y ago
        Just hang around bitcointalk and similar forums and make it clear that you can write code and know how to set up new tokens.
pfoof 4y ago
They just didn't share the revenue with proper people
raesene9 4y ago
It feels like the skeptics, who were pointing out last year that the rates on crypto yield products, were too good to be true, had a point. That's Celsius, Voyager, Blockfi, Genesis and now nexo all in some level of financial/legal trouble. The question is how much is still to be uncovered.
- louwrentius 4y ago
  All of them are liars by definition. We know they are all insolvent. Crypto doesn’t create any value, like with an investment in a regular business. So that must mean any profit is just money from the latest “unfortunates” that were foolish or desperate enough to buy in.
  - mschuster91 4y ago
    > Crypto doesn’t create any value, like with an investment in a regular business. Generally, I agree that a lot of "cryptocoin" usages are basically fraudulent and scams. Some of them are nothing more than "bragging rights" aka "look at me, I'm rich enough to waste 100 bucks on an NFT by the 45th" or that time when Twitter allowed one to display an NFT as a profile picture. There is one legitimate usage for cryptocurrencies however: anonymity. The amount of traceability that banks, secret services and police have into our lives simply by mapping our transaction activity is insane. Unfortunately, Bitcoin has way too much of an energy consumption and too high latency for mainstream usage outside of drug deliveries via dark web marketplaces, and the alternatives are way too volatile even compared to Bitcoin.
    - louwrentius 4y ago
      Anonimity is a fantasy that makes no sense if you think for a few seconds about it. There is always another person, a company or bank at the other end. The key issue isn’t anonimity but policy and politics. No technology can be above any law by definition.
      - mschuster91 4y ago
jesuscript 4y ago
How long before a good PR team re-brands crypto as "Alternative Finance Vehicles"? Feel like that crypto brand is taking quite the beating now days. Not Crypto, AFVs. The pitch: This is not another scam Crypto startup. This is an institutionally backed, fully transparent AFV. VCs: Oh, I see. Yep we're in.
saneehaf 4y ago
[flagged]
- permo-w 4y ago
  what
WinstonSmith84 4y ago
[flagged]
- gchokov 4y ago
  How about if he had an account with FIB Bank...?
- baybal2 4y ago
  > Btw, if anyone wants to finance terrorism by using a crypto exchange, let be clear: that's a very bad idea. Have your own wallet and use at least some privacy coins ... Or just buy your own bank... The disposable bank industry is thriving around the world, and is completely circumventing all of that nonsense AML theatre in its entirety. The draconian banking reporting regulation only impact individuals, but nearly none business accounts, and close to nothing is aimed at banking institutions themselves. You literally need more papers to open a bank account in some EU countries, than to buy a fully fledged tier 1 bank, with a central bank account, and direct access to FX exchanges, clearing, securities brokerages etc.
- luckylion 4y ago
  Off Topic: is baybal2 shadow banned on specific topics, or do their comments need to be actively allowed by a moderator or something? Everything is flagged as dead and they're harmless comments, but some comments occasionally are allowed. baybal2, if you're reading this: there's an issue.
- slim 4y ago
  financing terrorism (most likely related to the Russian/Ukrainian war as this is a conventional war, what do you mean financing terrorism? was he financing russia or ukraine?
  - dmos62 4y ago
    You're mistaking insurgency for terrorism. This is referring to Russia terrorizing the civilian population of Ukraine by systematically attacking purely civilian targets.
kevinak 4y ago
Response from Nexo: https://twitter.com/Nexo/status/1613477462243147776 https://twitter.com/Nexo/status/1613477462243147776
riialist 4y ago
The crypto business seems to be a bit on a "Winter is coming, and it will last for years" -phase in EU. An European Parliament vice-president and law-maker who was the most prominent lobbyist for more lax money-loundry regulation for cryptocurrencies is currently under detention - for money loundering and corruption. And yes I think cryptocurrencies will prevail in some form sooner or later, it's just not so good publicity that some of the most vocal proponents are caught red-handed with bags full of half a million euros. https://www.coindesk.com/policy/2022/12/12/pro-crypto-eu-lawmaker-eva-kaili-set-to-lose-vice-presidency-amid-corruption-probe/ https://www.coindesk.com/policy/2022/12/12/pro-crypto-eu-law...
nikolay 4y ago
I've recently tried sending money using different cryptos - Bitcoin, Ethereum, and USDC - this was the slowest, most expensive, and overly complicated funds transfer I've ever done! During the same week, I transferred money via Wise and Revolut - from one currency to another, etc. Of course, that latter beats any crypto! Not to mention that with regular wires you're charged a fixed fee - even if you send millions, the cost is the same, unlike with crypto, which ended up being a huge percentage trying different means to minimize the cost. To be honest, the only wonderful thing crypto offers is the ability to sign stuff with your wallet right in the browser - nothing else in the crypto world makes any sense! Everything else is just an elaborate pyramid or daylight robbery scheme and nothing more!

167 points by gchokov 4y ago

Yield products without a banking license, "proof that a Nexo client [...] was a person officially designated as financing terrorism". You'd think crypto exchanges would be more cautious, given the controversial nature of their business.

pjc50 4y ago
The whole business is full of one-way bets where you either escape with the money or go bankrupt/get arrested. I think they may have assumed that law enforcement in Bulgaria was not sophisticated enough to be interested in them.
- phoronixrly 4y ago
  > I think they may have assumed that law enforcement in Bulgaria was not sophisticated enough to be interested in them. It's not. This was an international op or with foreign intelligence tips/pressure to act. BG law enforcement was at best oblivious, at worst -- on payroll.
323 4y ago
> A report by public broadcaster Bulgarian National Television earlier in the day claimed that the investigation was also looking into breaches of international sanctions imposed on Russia. There are a lot of Russians which use Bulgaria as an EU base. The infamous BTC-e exchange was also in Bulgaria and operated by Russians, and engaged in wide-scale money laundering.
- sofixa 4y ago
  In this case it's reportedly only Bulgarians: > Mileva said that the people under investigation were Bulgarian nationals and the company, which she repeatedly described as a “cryptobank”, was operating primarily from Bulgaria. However there are lots of very pro-Russia Bulgarians (hard to explain after everything that has happened, but still..), so your point generally stands.
  - dollylambda 4y ago
    > However there are lots of very pro-Russia Bulgarians (hard to explain after everything that has happened, but still..), Here is an excerpt from wiki which explains why some in Bulgaria are still "pro-russia": "The Western European Enlightenment in the 18th century influenced the initiation of a national awakening of Bulgaria.[63] It restored national consciousness and provided an ideological basis for the liberation struggle, resulting in the 1876 April Uprising. Up to 30,000 Bulgarians were killed as Ottoman authorities put down the rebellion. The massacres prompted the Great Powers to take action.[73] They convened the Constantinople Conference in 1876, but their decisions were rejected by the Ottomans. This allowed the Russian Empire to seek a military solution without risking confrontation with other Great Powers, as had happened in the Crimean War.[73] In 1877, Russia declared war on the Ottomans and defeated them with the help of Bulgarian rebels, particularly during the crucial Battle of Shipka Pass which secured Russian control over the main road to Constantinople"
    - lotsofpulp 4y ago
      I do not see why a Bulgarian today would assume Russia’s actions in 1877 have any relation to what Russia might do or be capable of in 2023.
      - deleted 4y ago
        [deleted]
      - bluetomcat 4y ago
        It's an irrational love-hate relationship which is essential to the history of the modern Bulgarian state and creates the internal political divisions between "rusophiles" and "rusophobes". As a young nation (in modern terms) that has never been through the Enlightenment, we don't have our own political and intellectual traditions, and much of politics is perceived as orbiting around a superpower, be it Russia, continental Europe, or the USA.
    - gostsamo 4y ago
      Your answer is only part of the truth. Though Russia had lots of welwishers in Bulgaria, the heavy indoctrination happened during the communist rule 1945-1989. Many people whose best years were during this period are still alive and many are disappointed by the failures of the post 1989 governments. The topic is complex and filled in with lots of propaganda, so I won't get into disputes, just giving additional context.
aliqot 4y ago
You'd think exchanges would stop being centralized and manned operations with addresses.
bigbillheck 4y ago
> You'd think crypto exchanges would be more cautious Only if you haven't learned anything from the history of crypto exchanges going at least as far back as MTGOX.

louwrentius 4y ago

> She said that investigators had proof that a Nexo client, who used the company’s platform to transfer cryptocurrencies, was a person officially designated as financing terrorism, but gave no further details. All crypto is some form of crime, money laundering, evading sanctions, funding terrorism, or just a ponzi scheme, it's just different sides of the same thing. I wish this space would totally collapse. Maybe if Tether (which is totally insolvent) collapses the whole space just dies. That would make the world a better place. Yes, it's true: the dollar or any other currency can be used for nefarious purposes as well, but that's why we have so much financial regulations and oversight (which should be better). And most of all, the upsides of regular currency (if you can call crypto a currency at all) is that it's the foundation of our societies. I just want to see all crypto die in a fire. The profound negative impact crypto has had on our world with zero benefits makes me so sad.

mypastself 4y ago
Is Bitcoin a Ponzi? How exactly?
- lalaland1125 4y ago
  The only way to make money investing in Bitcoin is to convince a greater fool to buy your coins for more than you paid for them. And that greater fool must in turn convince an even greater fool, etc, etc It's not a Ponzi, but it has similar dynamics to a Ponzi in that you can only gain money through other people losing money.
  - krunck 4y ago
    Why does it have to be about making money? Bitcoin is a currency, not an investment. That's where a lot people get confused.
    - rubyist5eva 4y ago
      Bitcoin will never gain mass adoption as a currency, that leaves it as a "value store" - and the only people buying bitcoin are suckers buying bitcoin from others in the hope that they can in turn sell it to a bigger sucker down the line.

_xnmw 4y ago

I've noticed a recent spate of crackdowns on "hustlers" in the Eastern European space. See the recent takedown of Andrew Tate in Romania, for example, and now this.

tokai 4y ago
Maybe its like the Lenin statues. It's possible to get rid of them now while Russian strong men are busy.
martythemaniak 4y ago
Seeing Croatia make it into Schengen despite joining the EU 6 years later is quite embarrassing. There are large numbers of people in Romania and Bulgaria who are genuinely distressed that their countries are home to these unsavoury types and would like to put an end to it.

Kaizeras 4y ago

An ex-colleague of mine worked for OneCoin (another crypto scam originating from Bulgaria) when their offices got raided a few years ago. Now he’s an engineering manager at Nexo. I can see a pattern emerging in his career.

unicornmama 4y ago
A famous short seller, I think it was Chanos but I can't remember, once said in an interview that they follow where the management of past frauds go as a signal to determine future frauds.
- ErikAugust 4y ago
  I may start a hedge fund based on this alone.
dmos62 4y ago
Disruptive product-oriented technologist, with a mind for optimizing customer-business needs.
- sandworm101 4y ago
  Shady. Willing to be paid in strange currencies deposited in overseas banks. Likely to have tax troubles one day. Knows how to buy a plane ticket using cash. Strong opinions on Krugerrand valuation. Owns a motorcycle without an odometer. Bought a house with a series of 9,999$ travelers checks. More likely to install a Kim Dotcom-type panic room than run for public office.
  - Consultant32452 4y ago
    Where do I sign up?
    - luckylion 4y ago
      Just hang around bitcointalk and similar forums and make it clear that you can write code and know how to set up new tokens.

pfoof 4y ago

They just didn't share the revenue with proper people

raesene9 4y ago

It feels like the skeptics, who were pointing out last year that the rates on crypto yield products, were too good to be true, had a point. That's Celsius, Voyager, Blockfi, Genesis and now nexo all in some level of financial/legal trouble. The question is how much is still to be uncovered.

louwrentius 4y ago
All of them are liars by definition. We know they are all insolvent. Crypto doesn’t create any value, like with an investment in a regular business. So that must mean any profit is just money from the latest “unfortunates” that were foolish or desperate enough to buy in.
- mschuster91 4y ago
  > Crypto doesn’t create any value, like with an investment in a regular business. Generally, I agree that a lot of "cryptocoin" usages are basically fraudulent and scams. Some of them are nothing more than "bragging rights" aka "look at me, I'm rich enough to waste 100 bucks on an NFT by the 45th" or that time when Twitter allowed one to display an NFT as a profile picture. There is one legitimate usage for cryptocurrencies however: anonymity. The amount of traceability that banks, secret services and police have into our lives simply by mapping our transaction activity is insane. Unfortunately, Bitcoin has way too much of an energy consumption and too high latency for mainstream usage outside of drug deliveries via dark web marketplaces, and the alternatives are way too volatile even compared to Bitcoin.
  - louwrentius 4y ago
    Anonimity is a fantasy that makes no sense if you think for a few seconds about it. There is always another person, a company or bank at the other end. The key issue isn’t anonimity but policy and politics. No technology can be above any law by definition.
    - mschuster91 4y ago

jesuscript 4y ago

How long before a good PR team re-brands crypto as "Alternative Finance Vehicles"? Feel like that crypto brand is taking quite the beating now days. Not Crypto, AFVs. The pitch: This is not another scam Crypto startup. This is an institutionally backed, fully transparent AFV. VCs: Oh, I see. Yep we're in.

saneehaf 4y ago

[flagged]

permo-w 4y ago
what

WinstonSmith84 4y ago

[flagged]

gchokov 4y ago
How about if he had an account with FIB Bank...?
baybal2 4y ago
> Btw, if anyone wants to finance terrorism by using a crypto exchange, let be clear: that's a very bad idea. Have your own wallet and use at least some privacy coins ... Or just buy your own bank... The disposable bank industry is thriving around the world, and is completely circumventing all of that nonsense AML theatre in its entirety. The draconian banking reporting regulation only impact individuals, but nearly none business accounts, and close to nothing is aimed at banking institutions themselves. You literally need more papers to open a bank account in some EU countries, than to buy a fully fledged tier 1 bank, with a central bank account, and direct access to FX exchanges, clearing, securities brokerages etc.
luckylion 4y ago
Off Topic: is baybal2 shadow banned on specific topics, or do their comments need to be actively allowed by a moderator or something? Everything is flagged as dead and they're harmless comments, but some comments occasionally are allowed. baybal2, if you're reading this: there's an issue.
slim 4y ago
financing terrorism (most likely related to the Russian/Ukrainian war as this is a conventional war, what do you mean financing terrorism? was he financing russia or ukraine?
- dmos62 4y ago
  You're mistaking insurgency for terrorism. This is referring to Russia terrorizing the civilian population of Ukraine by systematically attacking purely civilian targets.

kevinak 4y ago

Response from Nexo: https://twitter.com/Nexo/status/1613477462243147776 https://twitter.com/Nexo/status/1613477462243147776

riialist 4y ago

The crypto business seems to be a bit on a "Winter is coming, and it will last for years" -phase in EU. An European Parliament vice-president and law-maker who was the most prominent lobbyist for more lax money-loundry regulation for cryptocurrencies is currently under detention - for money loundering and corruption. And yes I think cryptocurrencies will prevail in some form sooner or later, it's just not so good publicity that some of the most vocal proponents are caught red-handed with bags full of half a million euros. https://www.coindesk.com/policy/2022/12/12/pro-crypto-eu-lawmaker-eva-kaili-set-to-lose-vice-presidency-amid-corruption-probe/ https://www.coindesk.com/policy/2022/12/12/pro-crypto-eu-law...

nikolay 4y ago

I've recently tried sending money using different cryptos - Bitcoin, Ethereum, and USDC - this was the slowest, most expensive, and overly complicated funds transfer I've ever done! During the same week, I transferred money via Wise and Revolut - from one currency to another, etc. Of course, that latter beats any crypto! Not to mention that with regular wires you're charged a fixed fee - even if you send millions, the cost is the same, unlike with crypto, which ended up being a huge percentage trying different means to minimize the cost. To be honest, the only wonderful thing crypto offers is the ability to sign stuff with your wallet right in the browser - nothing else in the crypto world makes any sense! Everything else is just an elaborate pyramid or daylight robbery scheme and nothing more!