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Nexo sees withdrawals of $158 million in day after Bulgaria raid

Quick Take

  • Nexo has witnessed withdrawals of more than $158 million in 24 hours.
  • The withdrawals came after Bulgarian prosecutors began investigating alleged illegal activities conducted by Nexo.

Crypto lender Nexo has seen withdrawals worth more than $158 million in the last 24 hours after Bulgarian authorities raided its offices.

Nexo had 133,263 BTC (around $2.5 billion) in customer liabilities on Thursday at 2 a.m. ET and on Friday that number was 124,939 BTC ($2.37 billion) at the same time of day, reflecting withdrawals of 8,324 BTC ($158 million), according to real-time attestation provided by Nexo's auditor Armanino on its website.

Nexo co-founder Antoni Trenchev told The Block that the withdrawal number is about 2% of the firm’s total assets under management.

“Nexo can confirm that all systems are up and running and everything is being processed in real-time as always,” Trenchev said. “Activity is orders of magnitude smaller that post-Celsius and post-FTX.”

It was not clear if the attested numbers included only Nexo customers' bitcoin holdings or all their crypto holdings converted into bitcoin. Trenchev did not comment on it, but said that Nexo's partnership with Armanino was still on, although the latter reportedly announced exiting the crypto space last month.

Bulgaria raid

Nexo's withdrawals came after Bulgarian prosecutors began an investigation on Thursday into alleged illegal activities conducted by Nexo. "In Sofia, active steps are being carried out as part of a pre-trial investigation aimed at neutralizing an illegal criminal activity of crypto lender Nexo," said Siyka Mileva, a spokeswoman for the prosecutors' office, according to a Reuters report.

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Commenting on the raid, Nexo said in a statement on Thursday that Bulgaria is "the most corrupt country in the EU. They are making AML and tax-related inquiries about a Bulgarian entity of the group that is not customer facing but only has back office functions — payroll, customer support, compliance."

Earlier Friday, Larry Cermak, vice president of The Block Research, analyzed Nexo's EVM addresses from his database and found that the firm had $378 million in total holdings in 19 wallets, out of which $264 million was its own native nexo token.

"Only $114 million in non-nexo holdings on all EVM addresses combined. Would be very careful," Cermak said.

Commenting on the analysis, Trenchev said: "This is not an exhaustive list of EVM, non-EVM and exchange accounts. It doesn't make sense to keep large quantities of assets in hot wallets on chain sitting idle. Please refer to this thread as how our exchange aggregation and liquidations require assets to be on exchanges."

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