Cryptocurrency lending platform Nexo has hit back at so-called “fake news” and rumors that its founders were part of a charity embezzlement scandal, saying the claims were untrue and defamatory. She has given the originator of the allegations a public cease and desist.
In a blog post about the claims, Nexo explained:
“Multiple anonymous Twitter accounts are using lies and distortions in yet another smear campaign against Nexo, profiting from short positions in a troubled market.”
The pseudonymous Twitter account otteroooo, which calls itself “Otter,” posted a number of tweets on June 25, claiming that Nexo co-founders stole funds from Bulgarian charity HelpKarma to buy properties and fund “lavish private travel”.
NEXO FOUNDERS & FAMILY HAD TAKEN FUNDS FROM CHARITY FOR SICK CHILDREN, USED DONATIONS AS PERSONAL SLUSH FUNDS AND EVEN BUILT A PALACE FOR THEMSELVES
Evidence presented in full by Otter below
— otteroooo (@otteroooo) June 26, 2022
The thread found a large audience on Twitter, and Otter shared a screenshot that it had received over 9 million impressions, prompting Nexo to do so reply to what they say are “ridiculous allegations” and enact injunctive relief note.
Otter’s key claim is that HelpKarma founder and Nexo co-founder “Konsta Kanchev” used donation funds to help build a business palace instead of using the money for medical treatment of children.
Konsta Kanchev (Bulgarian Boy 1) embezzled the funds and built a Muthaf*ckin PALACE, “the size of a high school”.
The money came from the donations of more than 130,000 Bulgarians who willingly donated to what they believed was intended for the medical treatment of children pic.twitter.com/NCd7TLbF4A
— otteroooo (@otteroooo) June 26, 2022
A response from Nexo notes that a “Konsta Kanchev” does not exist and Otter deliberately used the name “to mimic a typo as an excuse for fact-checkers” by naming two different people, HelpKarma founder Constantine Krastev and Nexo co-founder Kosta Kantchev, as the same person.
Speaking to Cointelegraph about the merger of the two, Otter announced a delisting article by Bulgarian outlet Fakti, who says the two are cousins and that Constantine is spelled “Konstantin” in Bulgarian, but has made no further comment since.
Another key claim Otter makes is that as HelpKarma’s donations increased, payday loan company Credissimo began reporting substantial increases in its capital, citing a November 2020 report by Fakti, implying that the donations were used to fund Credissimo.
Otter points out how this scandal is related to Nexo in the Nexo white paper says it is “powered by Credissimo”. Credissimo was founded by Kantchev and Nexo co-founders Georgi Shulev and Antoni Trenchev were the companies’ business development and innovation officers respectively.
In response to the claims, Nexo said that it and HelpKarma “did not and never had any common operations, common beneficial ownership or common management,” adding:
“‘Why would a company with hundreds of millions in revenue and billions in assets under management audited by Fidelity, Mastercard and dozens of regulators ever resort to petty theft, let alone from children with medical needs?’ is the logical but neglected question.”
Cointelegraph contacted Nexo for comment on the allegations and has not yet received a response.
See also: Don’t Click on Links: Crypto Community Responds to Alleged Telegram Exposé
Nexo’s main motive for Otter publishing the allegations is so that Otter can garner a large following and sell the account.
Nexo shared pictures of a person trying to buy Otter’s account, to which Otter replies that they ask for at least 50,000 USD coin (USDC) to do so.
But in a twitter thread Posted by Otter on June 26, they claim they suspected the messages were a “setup” to buy the account so Nexo could silence them. They instead “hatched a troll plan” to sell the Otter account to collect Nexo’s “hush money” and set up another account to “further embarrass them.”
Nexo says this isn’t the first time they’ve been part of a so-called “coordinated attack,” citing allegations in 2020 that it was behind Zeus Capital, an asset management firm that wanted to short Chainlink (LINK).