Cryptocurrency lending platform Nexo hit back at what it called ‘fake news’ and rumors that its founders were part of a charity embezzlement scandal, saying the allegations were false and defamatory. It issued a public cease and desist notice to the author of the allegations.
In a blog post about the claims, Nexo said:
“Several anonymous Twitter accounts are using lies and distortions in yet another smear campaign against Nexo and profiting from short positions in a struggling market.”
The pseudonymous Twitter account otteroooo, which calls itself “Otter”, posted a series of tweet on June 25, claiming that the co-founders of Nexo stole funds from the Bulgarian charity HelpKarma to buy real estate and finance “lavish personal trips”.
NEXO FOUNDER AND FAMILY SIP CHARITY FUNDS FOR SICK CHILDREN, USE DONATIONS AS PERSONAL SLUSH FUND, EVEN BUILDING PALACE FOR THEMSELVES
Evidence presented in full by otter below
— otteroooo (@otteroooo) June 26, 2022
The thread garnered a large following on Twitter, with Otter sharing a screenshot that it had received over 9 million impressions, prompting Nexo to answer to what they say are “ridiculous allegations” and issue the cease and desist to remark.
Otter’s central allegation is that HelpKarma founder and Nexo co-founder “Konsta Kanchev” used funds from donations to help build a palace instead of using the money for the children’s medical treatment.
Konsta Kanchev (Bulgarian Boy 1) embezzled the funds and went on to build a muthaf*ckin PALACE, “the size of a high school”
The money came from donations from more than 130,000 Bulgarians who willingly donated for what they thought was for the medical treatment of children. pic.twitter.com/NCd7TLbF4A
— otteroooo (@otteroooo) June 26, 2022
In a response from Nexo, he points out that a “Konsta Kanchev” does not exist and Otter deliberately created the name “to mimic a typo as an excuse for fact checkers” by confusing two separate people, the founder of HelpKarma, Constantine Krastev and Nexo co. -founder Kosta Kantchev, as the same person.
Speaking to Cointelegraph regarding the confusion of the two, Otter shared a delisted article from Bulgarian outlet Fakti saying the two are cousins and that Constantin in Bulgarian is written “Konstantin” but has since provided no further comment.
Another major allegation from Otter is that as donations from HelpKarma grew, payday loan company Credissimo began reporting sizable capital increases, citing a November 2020 report. report by Fakti, implying that the donations were used to fund Credissimo.
On how this scandal relates to Nexo, Otter points out that the Nexo white paper said it is “powered by Credissimo”. Credissimo was founded by Kantchev, and Nexo co-founders Georgi Shulev and Antoni Trenchev were the business development and business innovation managers respectively.
In response to the claims, Nexo said that it and HelpKarma “do not and have never had any common operations, common beneficial owners or common management“, adding:
“Why should a company with hundreds of millions in revenue and billions in assets under management, approved by Fidelity, Mastercard and dozens of regulators, resort to petty theft, let alone children with medical needs?” is the logical but overlooked question.
Cointelegraph has contacted Nexo to comment on the allegations and has yet to receive a response.
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The main motive stated by Nexo for why Otter published the allegations is so that Otter could gain a large audience and sell the account.
Nexo shared footage of an individual who tried to buy Otter’s account, to which Otter replies that he wants a minimum of $50,000 in coins (USDC).
But in a Twitter thread posted by Otter on June 26, they claim they suspected the posts were a “set up” to buy the account so Nexo could silence them. Instead, they “devised a troll plan” to sell the Otter account to collect Nexo’s “silence money” and create another account to “continue exposing them”.
Nexo says this isn’t the first time they’ve been involved in what they call a ‘coordinated attack’, citing accusations in 2020 that it was behind Zeus Capital, an asset management firm that wanted to run -circuit Chainlink (LINK).