Nexo’s Israeli Connection and Cornering Bulgaria’s Human Capital Markets
TEL AVIV, ISRAEL – In an interview last week to the Israeli newspaper of record Haaretz, Bulgaria’s Prosecutor General Ivan Geshev floated the possibility of filing a “mutual legal assistance request” with corresponding authorities of the Zionist nation, in order to exchange information about the allegations of terrorist financing currently headlining the Bulgarian investigation of cryptocurrency lender, Nexo.
In the summer of 2021, Israel’s National Bureau for Counter Terror Financing (NBCTF) seized dozens of crypto wallets belonging to seven individuals accused of violating Israel’s anti-terrorism laws. Among the $7.7 million purportedly funneled through these “Hamas-linked” wallets, Geshev’s Bulgarian justice department is focusing on two transactions from a single wallet that reportedly took place on the Nexo platform back in 2019.
A company spokesperson told Haaretz that since the wallet in question “was not in any way targeted or sanctioned by the NBCTF and was not identified as having exposure to any illicit activity” at the time of the transfer itself, Geshev’s crusade against Nexo is a non-starter, adding that Bulgarian authorities’ “very basic knowledge of how blockchain technologies work” further compromised the inquiry.
Indeed, the July 2021 crypto wallet seizure order was only the first such action by Israel’s NBCTF and has since been followed by five more, with the last one coming the day before Bulgarian police raided Nexo’s facilities in Sofia earlier this year. Nexo’s assertions that the Prosecutor General’s investigation is politically motivated seems plausible enough, but the cryptolender itself may be nothing more than a straw man for Euro-Atlanticist hegemony.
According to Ciphertrace, a Department of Homeland Security-funded blockchain forensics company founded by a member of the lionized ‘cypherpunk’ circles, the funds of the wallets targeted by Israel’s NBTCF were accessed by the military wing of Hamas, known as the Al Qassam brigades, and funneled to “al-Qaeda controlled addresses” before being deposited at a “large, global exchange” they fail to identify.
Chainalysis, another U.S.-based “crypto intelligence” firm created to investigate the foundational Mt. Gox cryptocurrency exchange fraud in the nascent days of Bitcoin, and which partners with the FBI, IRS and Europol, commended Israeli authorities for the “successful operation” in a July 2021 blog post.
Hailing the apartheid state’s use of open source intelligence (OSINT) “to find Hamas’ donation addresses”, Chainalysis joins Ciphertrace in promoting pro-Western geopolitical narratives and buttresses cryptocurrency’s ultimate use case as the canary in the coal mine of a global digital enclosure, despite devious claims to the contrary by servile alt-media personalities carrying water for technoscientific capitalism.
Well aware that friendly relations with Israel are a requirement of Bulgaria’s Euro-Atlanticist ambitions, Ivan Geshev was careful to avoid shedding too much light on his country’s proximity to powerful Israeli networks operating in the region at the behest of its Western sponsors. Asked by Haaretz if Israeli authorities had provided any help thus far in the Nexo investigation, Geshev exercised diplomatic restraint, stressing that cooperation between his agency and Israel would be limited to the judicial realm, eschewing any “intelligence level” matters.
Earlier this month, Nexo’s head of Corporate Finance and co-founder Kalin Metodiev, was arrested and compelled to cooperate with authorities over the suspicious transactions tied to one of the wallets listed in the Israeli Ministry of Defense’s 2021 seizure order. Metodiev, whose father is the honorary Consul of Israel to Bulgaria, has connections to very powerful Israeli interests in his own right.
Long before the U.S.-educated accountant entered the cryptocurrency universe, Metodiev worked as the national sales director and head of private banking for Bulgaria’s largest asset management firm at the time: TBI Asset Management (TBI AM). The company, which has since changed name and ownership, was then part of the Kardan Group – one of Israel’s biggest investment firms currently active in illegal Israeli settlements on the West Bank, with considerable interests throughout Eastern Central Europe and at the time of Metodiev’s employment, a major stakeholder in Bulgaria’s largest private pension fund.
The Kardan Group
Founded by an Antwerp diamond industry mogul in 1990, the Kardan Group comprises dozens of companies across Central Europe and Israel. From real estate to engineering, finance and tech, Kardan’s holdings span multiple sectors and its C-suites feature people like long-time Israeli Foreign Ministry official and Elbit Systems director, Yoram Ben-Zeev.
In 2003, Kardan brought all of its companies under the umbrella of a Dutch publicly-traded vehicle, Kardan NV. The purpose of this consolidation concerned its intention to streamline its investments in Eastern Central Europe, particularly those relating to Romanian and Bulgarian markets, which presented uniquely profitable opportunities in the non-banking finance sector.
Bulgaria, specifically, held great promise for the consumer loan shark business in the earliest days of the post-communist era, given the population’s drastically reduced standard of living and a massive pension system in the process of privatization at the hands of the SOE (state-owned enterprise) mafias. Pension reform would emerge as one of the nation’s most politically-charged issues and a focal point for international finance players, which played a major role in the establishment of Bulgaria’s modern-day “three pillar” pension system.
Through its subsidiary, TBIF Financial Services, Kardan would raise its ownership stake in Bulgaria’s largest private pension fund, PAC Doverie, to 100% in 2007 and Metodiev, who had returned to Bulgaria following early stints at Wells Fargo and Metlife Securities in New York, would head up TBIF’s asset management and private banking division.
Metodiev came to TBI Asset Management from Allianz, a Bulgarian bank where Ruja Ignatova, then a McKinsey & Co. consultant, had been advising on matters relating to Eastern Central European investments concurrently. Both would soon find themselves working on PAC Doverie-related undertakings, with a young Metodiev assuming client acquisition duties for the fund’s owner and Ignatova handling the investments of one of TBI’s newest investors, Tsvetelina Borislavova.
As covered in the second installment of this series, Borislavova and Ignatova went into business together, while the latter was still employed by McKinsey, in a venture called Multinational Asset Portfolio (MAP) Support. That company was soon merged with other outfits Borislavova managed on behalf of Bulgarian mob interests and became part of Clever Synergies Investment Fund (CSIF), where Ignatova would go on to hold several directorships and executive responsibilities, including chief executive of CSIF Financial Services.
CSIF’s family of companies had come from the restructuring of the mob-controlled CIBank, which Borislavova had executed during the Simeon II government, where she and her boyfriend – future Prime Minister Boyko Borisov –, were baptized as members of Bulgaria’s new Euro-Atlanticist establishment. In 2005, just as CSIF was first registered, Borislavova doubled CIBank’s shares in TBI Bulgaria AD, the Bulgarian subsidiary that held all of Kardan Group’s assets in the country, including its stake in PAC Doverie.
Ignatova would remain with CSIF-related companies until at least 2011, when her name begins disappearing from corporate records. However, it is precisely in this period when Ignatova would pull off the tragic bait and switch at the German metal works plant detailed in the first installment, which she initiated while still managing multiple CSIF concerns.
Whether CSIF played any role in the cast iron factory fiasco or it was just an independently-concocted scam by the budding fraudster is impossible to know with any certainty. But immediately following the sale of Waltenhofen Gusswerk and the betrayal of hundreds of unionized German iron workers, Ignatova would turn her attention towards a much larger pool of proletarian victims with her idea for a cryptocurrency-based pension fund – the original plan for OneCoin.
Making Slavery Great Again
For decades, the Bulgarian pension system had guaranteed a good standard of living for the country’s working classes. Ironically, Ruja Ignatova’s family had emigrated to Germany after the collapse of communism precisely because of the precipitous drop in that standard of living, forcing her father – an engineer – to seek opportunities elsewhere.
Pension reform has been a political touchstone for the Euro-Atlanticist take-over of Bulgaria and has played a significant role in the molding of the post-communist Bulgarian body politic. Still largely unresolved, it is a Leviathan that lurks uneasily in the background and continues to disrupt all power dynamics in the country.
In tandem with banking reforms, the social welfare systems in post-communist Bulgaria were placed in the hands of private Western financial institutions like Deutsche Bank and Bankers Trust. While USAID and KPMG organized training sessions for Bulgaria’s central bankers and the private finance industry, the OECD and the World Bank financed studies to hash out new market-aided pension schemes.
In the meantime, rampant hyperinflation brought about by liberal economic reforms, like privatizations, onerous structural adjustment programs, and unceasing political turmoil set the stage for the country’s non-banking finance industry to flourish. Payday lending, car and property title loan companies and other forms of exploitative access to non-bank credit proliferated in Bulgaria as Euro-Atlanticism strengthened its grip on the nation.
Creditex, a Bulgarian property title loan company owned by TBI, pioneered the non-bank lending sector in Bulgaria and was the harbinger for Credissimo, the company that would spin out Nexo years later. People were caught off guard by the innovative loan shark techniques and unclear contract terms, which resulted in many debtors losing their collateral and, in some cases, left in total economic ruin.
Desperate Bulgarian workers turned to dodgy employment opportunities outside of their borders and finding themselves part of massive human trafficking operations run by Israeli man power companies, like the migrant worker scandal of 2003, when 6,000 Bulgarian workers contracted to bring their industrial labor skills to Israel were essentially kidnapped and held against their will.
Not limited to Bulgarian nationals, these practices have continued in the face of extensive, though clearly insufficient, media attention. A more recent instance of similar outrages in 2013 forced Bulgarian authorities to close a labor camp in Israel over poor working conditions.
Unfortunately, Bulgaria’s corrupt leadership and wealthy elites seem perfectly willing to kowtow to Israel’s political demands despite the appalling treatment of its citizens if it means more Euro-Atlanticist brownie points. Only a year after the labor camp closures, Bulgaria accepted Israel’s offers to hire more Bulgarians in exchange for official opposition to the establishment of a Palestinian state.
The New Reds
Kardan had begun setting up its Bulgarian operation in the early 2000s, with the establishment of TBIF subsidiaries like TBI Invest, TBI Credit and TBI Asset Management among others, aided by then president of Bulgaria’s Privatization Agency, Apostol Apostolov, who would soon thereafter join TBI Invest himself.
In 2007, Kardan moved to assert near total control over TBI Bulgaria and expand its operations throughout Eastern Central Europe and Russia, including Ukraine. Partnering with Deutsche Bank, the European Bank for Reconstruction and Development (EBRD) and other Atlanticist financial institutions, the Dutch-Israeli multinational would spread its tentacles far and wide on the eve of the 2008 crisis that was about to remake the world financial order.
Two years later, Kardan sold a majority stake of PAC Doverie and one of its other major Bulgarian assets, Bulstrad insurance firm, to Austria-based Vienna Insurance Group. Readers of the series will recognize Bulstrad as the company where Nexo co-founder, Antoni Trenchev’s father, worked as a lawyer during his days as a Bulgarian secret service counterintelligence agent in Germany.
By 2012, Kardan was ready to shake things up again and brought in the outgoing Accountant General of the Israeli Ministry of Finance (2007-2011), Shouky Oren, to serve as CEO. Tasked with “reducing the company’s debt while simultaneously overseeing improvement in the results of its underperforming subsidiaries”, Oren devised a series of exits that reorganized the company’s various investments in Bulgaria and other parts of Eastern Central Europe.
A bit of a Euro-Atlanticist shell game was revealed after a mysterious new buyer for PAC Doverie appeared seemingly out of nowhere in 2013. United Capital, an Austria-based joint stock company submitted a bid to take Bulgaria’s biggest private pension fund off the hands of Vienna Insurance Group, which endorsed the deal. The government of Boyko Borisov, then presiding over his second term as Prime Minister, nixed the deal a year later.
Tsvetelina’s increasingly distant boyfriend had let his intelligence services hounds loose on the shadowy company, disclosing its real ownership, which turned out to be comprised of Sergey Mastyugin, a Russian banker who would later be indicted of embezzling $32 million by a Moscow court, and a Bulgarian national residing in Austria named Stoyan Staykov, who would later become embroiled in a corruption scandal with Heinz-Christian Strache, leader of an Austrian far right party, who met with Michael Flynn at Trump Tower just days after the 2016 American election.
Dubbed the “Ibiza” scandal, Austrian media accused Staykov of delivering a €55,000 bribe to an Austrian MP in order to grease the wheels for a renewed attempt to acquire the Bulgarian pension fund. Staykov vehemently denies the allegations, claiming that while he did, in fact, give the MP money, Staykov assured Bulgarian press that it was actually a loan. Staykov pushes back against rumors that he was trying to organize a coup against Borisov together with two of his political rivals:
“I am friends with both of them and I represent the association in a security project in Austria that I can provide you with. I have personally invested my money; it is for strengthening and modernizing the technologies to prevent illegal migration in Bulgaria. The project has also been discussed in America with Mr. Giuliani, who is Donald Trump’s lawyer. This also makes another thing clear – I am not a Russian spy, there is no way I’d be invited to the American Congress if I was.”
Regarding his invitation to the U.S. Congress, Staykov is referring to the 10th Parliamentary Intelligence Forum, which took place in Washington D.C. and was organized by then Rep. Robert Pettinger (R-NC), chairman of the Congressional Taskforce on Terrorism and Unconventional Warfare. According to Staykov, the invitation to attend came directly from Pettinger himself.
