Nexo Turmoil Causing Tension in Bulgarian Parliament

The scandal around the cryptocurrency lending platform Nexo has triggered a massive verbal fight between the leading political parties in Bulgaria. GERB (the party that ruled between 2009 and 2021) alleged Democratic Bulgaria and We Continue the Change of having close ties with the distressed entity and even receiving significant donations from it.

On the contrary, numerous MPs claimed that members of GERB have intentionally launched such attacks against their rivals to prevent them from forming an acting government.

Nexo Creates Huge Drama in Bulgaria

The platform that allows users to earn interest on crypto deposits has had a rough start to the year after the Bulgarian authorities raided its local offices. The operation was part of a probe into suspected tax crimes and money laundering.

The investigation quickly turned into one of the main topics in the Eastern European country, while the leading political parties used it as an opportunity to hurt each other’s reputation.

Boiko Borisov (PM of the nation between 2009 and 2021) and other members of his GERB party said five employees of Nexo donated 20,000 BGN each to Democratic Bulgaria (a major rival of the former ruling organization) in October 2021. It was disclosed that two more workers of the crypto platform followed suit, giving away the same amount days later.

GERB went even further, vowing to check whether Nexo has financed the political campaign of “We Continue the Change” (the party that won the elections in 2021 and stayed at the helm until June last year). Borisov’s organization and other members of Bulgaria’s political elite also claimed that the former Finance Minister Asen Vasilev was part of Nexo’s inner circle and acted on behalf of the company.

Vasilev said last year that the government has been exploring options to embrace a crypto payment mechanism “in the short to medium term.” He revealed the ruling body will partner with the central bank and “industry players” on the move (without particularly mentioning Nexo).

Reaction to the Accusations

Members of We Continue the Change were quick to refute the allegations, claiming the scandal is one of GERB’s PR actions against its opposition. 

MP Kalina Konstantinova believes the prosecution launched the Nexo investigation at the exact time when President Rumen Radev was about to give Democratic Bulgaria (a close ally of We Continue the Change) a mandate to form a government and thus leave GERB out of the equation.

“But I think people can see past the facade that is meant to distract from the important subject. Namely, the formation of a cabinet and the consideration of one of the most important anti-corruption laws, the one on control over the chief prosecutor,” she added.

Democratic Bulgaria’s leader – Hristo Ivanov – admitted that his party received donations from Nexo employees. However, he sees nothing wrong with that, stating the transactions were publicly registered and reported to the Audit Office. 

“This means telling the people who gave this money, the entire Bulgarian community that donated, that there is something wrong with it,” he said.

Ivanov shared Konstantinova’s stance that the prosecutors’ efforts against Nexo came at the right time when Democratic Bulgaria was about to obtain the chance to establish a cabinet and enforce major judiciary reforms:

“How exactly was Thursday chosen in the week in which the third term is to be served, and it is clear that we, in the third term, will try to resolve the issue of the status of the attorney general. Let there not be some propaganda exploitation of an otherwise real investigation here.”

What About Asen Vasilev?

The former Finance Minister rejected the rumors that he had close relations with Nexo and that the platform financially backed We Continue the Change. The allegations that Vasilev was hiding on an unknown island were also refuted as he talked in front of journalists in the center of Bulgaria’s capital – Sofia.

He also described the Nexo saga as a “big media smoke,” predicting that the accused executives of the cryptocurrency platform could sue Bulgaria for undermining its reputation:

“The final effect of these actions, what will happen, is most likely that Bulgaria will be condemned by those whose interests have been damaged, whom the prosecution is attacking, and that we will have to pay compensation from the budget.”

Nexo has previously claimed that the prosecutors’ actions are against the law, vowing to take the case to court. It asserted that it complied with all anti-money laundering policies, but some watchdogs have adopted the “kick first, ask questions later approach.”