Crypto Lender Nexo To Restructure 2 UK-Based Units Amid Investigation

London-based cryptocurrency lender Nexo is planning to restructure two of its subsidiaries in the United Kingdom, namely Nexo Financial Services Ltd. and Nexo Clearing and Custody Ltd, the company told International Business Times on Friday.

"As a standard business practice, restructuring these entities sometimes becomes necessary to consistently deliver high-quality, secure, and sustainable services to our clients and nothing about Nexo's offering is changing," the company's spokesperson told IBT.

"Nexo is currently rethinking the way оf its client service, while steadfastly affirming its commitment to maintaining a presence in the U.K. market without any intention of withdrawal," the spokesperson added.

Nexo, which launched in 2018, claims to have over 5 million customers and offers a wide range of services, including crypto lending, custody, loans, yield-generating investments, and debit cards.

The move to restructure the two subsidiaries comes as the company undergoes investigation in Bulgaria for its alleged involvement in an organized criminal scheme.

In January, Bulgarian authorities conducted a raid on Nexo's offices in Sofia as part of their investigations. The prosecutors launched an investigation into alleged illegal activities conducted by Nexo, raiding more than 15 sites in the capital.

As per reports, over 300 investigators, police officers and security officers were involved in the operation, which was set up for an organized crime group, tax crimes, money laundering, banking activity without a license and computer fraud.

Subsequently, in February, four individuals employed by Nexo were charged by the Bulgarian prosecutors for operating as an organized crime group and engaging in activities such as money laundering, unlicensed banking, tax evasion, and computer-related offenses.

Trenchev had disputed the charges laid out by the Bulgarian authorities against Nexo.

"The charges are ludicrous, there is no other word for it...They give loud press conferences, they make a bunch of accusations and they have no follow-through after that," he told Bloomberg TV.

The investigation came after Nexo announced in December it would cease offering its products and services in the United States.

Nexo has also faced other legal disputes. The US Securities and Exchange Commission (SEC) imposed a $22.5 million fine on the company for failing to register its retail lending product. The crypto platform reached a settlement with the SEC in January, agreeing to pay $45 million in fines.

Nexo runs an investment platform that enables individuals to stake and borrow against cryptocurrencies. Although the company has offices in the United Kingdom, Bulgaria, and Switzerland, it apparently does not provide its services to Bulgarian residents due to potential concerns regarding the local government.

(This article has been updated to reflect comments made by a Nexo spokesperson.)