A crypto wallet from Nexo has gone missing

Nexo is in court against its co-founder, Georgi Shulev, over a hardware crypto wallet full of assets worth $12 million that has gone missing. 

Nexo in a lawsuit with Shulev over missing $12 million crypto wallet

The trading platform, Nexo, has gone to court to take back the company’s $12 million crypto hardware wallet, which appears to have disappeared. 

Nexo reportedly claims that its co-founder Georgi Shulev has the Ledger hardware wallet, containing some of the company’s cryptocurrencies. 

Basically, this past 27 June, the ruling issued by the High Court in London has the two counterparts vying for such a crypto wallet, but its whereabouts remain unclear. And in fact, there are two versions about it: 1) it is in the hands of Shulev and 2) it is in the custody of Bulgarian law enforcement. 

Shulev left the company that provides cryptocurrency trading, lending, and custody services back in 2019. But from what has emerged, it appears that the legal dispute between Shulev and Nexo began in 2022. 

Specifically, it appears that the parties would have already been fighting over control of a BitMEX account opened by Shulev in his name, but against Nexo. However, after Shulev’s dismissal, both Nexo and the co-founder failed to regain control of that account. 

By contrast, BitMEX decided to freeze the funds, later releasing them to Nexo upon a court decision. At the same time, Nexo claimed to have lost nearly $7.9 million during the period due to the decline in the value of the crypto assets. 

The Nexo vs Shulev battle over the $12 million crypto wallet

Apparently there is bad blood between the Nexo company and its co-founder Shulev, especially after his dismissal in 2019. 

And indeed it has been precisely since that time that Shulev has been waiting to receive the promised Nexo assets, which he apparently has not yet received. From there came the litigation over the BitMEX account, which Nexo won in court, and much more. 

For instance, another document accused Shulev of moving 45,232,012 Nexo tokens (NEXO) from a wallet he controlled to a new one, sending Nexo an email with the new wallet’s seed phrase. Evidently, Shulev did not confirm that he did this. 

Returning to the present, Nexo told the court that Shulev retained access to a reserve of 17.3 BTC, 27,000 USDT, 4.5 ETH, and significant amounts of BNB, XRP, and XML. 

All of these assets are stored on a missing Ledger hardware wallet and, neither Shulev nor Nexo, admit to having possession of the device.

The $45 million fine to be paid to the US SEC

In addition to the internal affairs of Nexo and its co-founder, the crypto company had also been sued in September 2022, in as many as eight US states, for allegedly selling unregistered securities. 

The lawsuit found Nexo guilty of promoting and selling securities in the form of an interest-bearing virtual currency account called an Earn Interest Product (EIP). 

After a full four months, in January 2023, Nexo was able to reach an agreement with the US SEC whereby it agreed to pay $45 million. 

This is the payment of a hefty fine, as well as a promise by Nexo to cease the unregistered offering of crypto lending products.