Authorities say they have evidence a Nexo user has been officially declared a terrorist financer.

Crypto lender Nexo is being investigated by authorities in Bulgaria on suspicion of money laundering, tax offenses, banking without a license and computer fraud.

The Bulgarian Prosecutor’s Office is conducting an investigation in Sofia to “neutralize the criminal activity” of Nexo, according to an automated translation of a statement issued on Facebook Thursday. More than 300 people are involved in the operation.

“The main organizers of the scheme are Bulgarian citizens, and the activity was carried out mainly from the territory of Bulgaria,” Attorney General Siika Mileva said in the statement. “Evidence has been collected that a person who used the platform and transferred cryptocurrencies has been officially declared a terrorist financing person,” according to the statement.

In a thread on Twitter, Nexo said it is cooperating with relevant authorities and regulators. It said it had stringent anti-money-laundering (AML) and know-your-customer (KYC) policies and implied it was being targeted unfairly.

“There are authorities at one of Nexo’s offices in Bulgaria, which is, as you know, the most corrupt country in the EU (European Union),” a Nexo spokesperson said in an email to CoinDesk. “They are making AML and tax-related inquiries about a Bulgarian entity of the group that is not customer facing, but only has back office functions – payroll, customer support, compliance. We are one of the most stringent entities with regards to KYC/AML.”

Following news of the investigation, more than $3 million left the company’s platform. The lender’s native coin sank around 7% to as low as 70 cents. At the time of writing, it was priced at just under 73 cents

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Vauld believes that the latest acquisition proposal by its fellow lender “would not be in the best interests” of its creditors.

Cryptocurrency lender Vauld rejected Nexo’s revised acquisition proposal and is seeking to terminate the negotiations between the two firms, saying the deal “would not be in the best interests” of its creditors.

“We have sought a mutual agreement with Nexo to terminate the existing exclusivity arrangements, and we are continuing our active engagement with the shortlisted fund managers in developing a viable strategy that would best serve the creditors’ interests,” Vauld said in a statement Thursday.

The two firms started talks in July after Vauld suspended all withdrawals, trading and deposits on its platform and filed for creditor protection in Singapore. It has until Jan. 20 to work on a restructuring plan. The talks looked to be over at the end of last year, when Vauld said the acquisition had been canceled. Nexo, however, responded that it wasn’t calling off the deal and took the step of writing an open letter to Vauld’s creditors.

Nexo, which is also a crypto lender, said it still wants to proceed with the acquisition.

“Mid-next week, Nexo will host a live AMA (ask-me-anything) session to address all outstanding questions about our proposal, and we are adamant about the fact that this is the offer that creates most value for Vauld’s customers,” a Nexo spokesperson said in an email. “We will also be putting out another open letter on the topic to ensure transparency.”

As of July 8 last year, Vauld owed $402 million to its creditors, 90% of which originated from individual retail investor deposits. A month after it filed for creditor protection, Indian authorities froze assets worth 3.7 billion rupees ($46.4 million).

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Nexo offered to buy some assets from lending competitor Celsius to ensure obligations to customers can be met.

Cryptocurrency lending platform Nexo said it’s interested in buying certain assets from rival Celsius, in particular its collateralized loan portfolio.

The announcement came in response to Celsius’ decision to freeze withdrawals and transfers, citing extreme market conditions.

In a letter to Celsius on Monday, Nexo offered to buy “substantially part of or all of the remaining qualifying assets … comprising mostly or fully of collateralized loan receivables secured by corresponding collateral assets, as well as brand assets and the customer database.”

Nexo, based in Zug, Switzerland, publicized the letter, which didn’t mention a price, in a tweet.

Unlike Celsius, which reports platform inflows and outflows on a weekly basis, Nexo provides a real-time audit of custodial assets.

In its recent audit, Nexo revealed that it had $6.2 billion in customer liabilities. It held assets in excess of that amount.

The Nexo token price is down by 22% in the past 24 hours amid a market-wide sell-off. Celsius’ CEL token has lost more than 50% of its value following its announcement earlier Monday.

Celsius, which is headquartered in New Jersey and has a subsidiary in London, had not responded to requests for comment by publication time.

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