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Kosta Kantchev

Kosta Kantchev is the Co-founder and Executive Chairman of , a regulated digital assets institution. He is a Bulgarian entrepreneur, early adopter, and advocate. [1][2]

Education

Kosta Kantchev holds a Bachelor’s degree in Business Management and Finance from Richmond, The American International University in London, completed in 2008. He further obtained a Master’s Degree in Finance from Webster University in 2009. Additionally, he attended Lycée Henri IV in Paris for Classe préparatoire (ECE) in 2004-2005. Kosta is also a Certified Anti-Money Laundering Specialist (CAMS), accredited by ACAMS.[1][2]

Career

Early Ventures

Kosta Kantchev began his entrepreneurial journey at the age of 14, founding his first startup. This early experience set the stage for his future ventures in the fintech industry.

Credissimo

In 2007, Kosta co-founded Credissimo, an international FinTech group providing instant online consumer loans, e-commerce financing, and bill payment services. Under his leadership, Credissimo expanded to six countries and became a market leader in two of them. The company went public in 2014 and launched the world’s first loan application chatbot in 2016. Kosta served as a board member until 2021.

Nexo

In 2017, Kosta Kantchev co-founded , a regulated digital assets institution. Nexo offers products and services such as Instant Credit Lines™, high-yield Earn Interest Products, an instant Exchange service, and advanced trading and OTC capabilities. The company prioritizes custodial insurance and security for the Nexo Wallet. Under Kosta’s leadership, Nexo has processed over $80 billion for more than 4 million users across 200+ jurisdictions.

introduced crypto-backed credit lines and the first fully automated lending platform. The company also launched the first crypto credit card in collaboration with Mastercard and expanded services with Nexo Prime, a prime brokerage service, and Nexo Ventures, its investment division. Nexo maintained stability, security, and transparency during the volatile crypto market of 2022, adhering to strict risk management protocols.[1][2]

Philanthropy

Kosta Kantchev has contributed to philanthropic initiatives, supporting charitable campaigns worldwide. These include aiding victims of earthquakes in Turkey and Syria, supporting those affected by the war in Ukraine, donating to developers, and partnering with organizations like Save the Children and NEXT for AUTISM to promote children’s nutrition and autism awareness.[1][2]

Legal Issues and Investigations

Bulgarian Raid and Allegations

In January, the Bulgarian Prosecutor’s Office conducted a raid on offices in Bulgaria, citing the need to address alleged illegal activities. Authorities stated that a client of the platform was classified as an organizer of terrorist activity. The investigation involved 300 personnel from various government departments. responded by emphasizing its compliance measures and criticized what it viewed as aggressive regulatory actions.

Asset Under Management and Competitors

assets under management decreased from $15 billion in mid-2021 to $2.4 billion. Amidst the market downturn, competitors like BlockFi and filed for bankruptcy. Nexo’s attempted acquisition of Singapore-based competitor Vauld was unsuccessful as Vauld terminated negotiations.

New York Attorney General Lawsuit

In September, the New York Attorney General filed a lawsuit against , alleging that its exchange and lending products required securities and commodities broker-dealer licenses, which it did not have. This added to Nexo’s legal challenges.

Prosecutor’s Office Halts Criminal Proceedings

In December, the Bulgarian Prosecutor’s Office halted criminal proceedings against Kosta Kantchev, , Trayan Nikolov, and Kalin Metodiev, citing a lack of evidence for money laundering, tax crimes, or computer fraud. The investigation indicated that activities were likely managed outside Bulgaria, highlighting the legal ambiguities surrounding regulation in the country.

Settlement with U.S. Regulators

Following the January raid, agreed to a $45 million settlement with the U.S. Securities and Exchange Commission and the North American Securities Administrators Association for failing to register the offer and sale of its Earn Interest Product. The platform ceased offering this product in April and announced plans to wind down operations in the U.S. due to regulatory uncertainties.

Bloomberg Report on Charges and Investigation

Bulgarian prosecutors charged four individuals connected to , including Kosta Kantchev, with forming an organized crime group related to money laundering, unlicensed banking activities, tax, and computer crimes. Authorities seized money, computers, and assets during the investigation. Nexo co-founder asserted that Nexo adheres to high standards of and practices.

Impact on Nexo’s Operations

The raid resulted in nearly $45 million in net token outflows from within 24 hours. Despite these challenges, Nexo maintained operational systems and continued to serve its global customer base. The company’s legal and regulatory hurdles highlight the complexities of the industry.

Nexo Sues Bulgaria for Over $3 Billion

Nexo AG and its subsidiaries filed a $3 billion arbitration claim against the Republic of Bulgaria. The claim, submitted at the World Bank’s International Centre for Settlement of Investment Disputes (ICSID) in Washington, DC, seeks damages for what describes as wrongful and politically motivated actions by Bulgarian authorities. Represented by the U.S. law firm Pillsbury Winthrop Shaw Pittman LLP, Nexo argues that the investigations caused significant financial and reputational harm.

Following the exoneration of Nexo’s executives by the Sofia City Prosecutor’s Office in December, Nexo co-founder highlighted the impact of the January raid on the company’s operations. He noted the loss of business opportunities, including a funding round and an initial public offering on a major U.S. stock exchange valued between $8 billion and $12 billion. Additionally, Nexo had to abandon a strategic partnership with a major European football club.

Trenchev emphasized that despite the raid’s impact, continued its operations but faced slowed growth and missed opportunities. The arbitration claim aims to secure financial compensation and deter future unwarranted actions against enterprises. [3][4][5][6]


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Kosta Kantchev

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Edited On

July 9, 2024

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