After unsuccessful criminal investigations, cryptocurrency lending platform Nexo is suing the Bulgarian government for $3 billion in damages.On January 24, Nexo wrote directly to Cointelegraph outlining the specifics of its $3 billion arbitration claim against the Republic of Bulgaria.It has filed a claim with the International Centre for Settlement of Investment Disputes (ICSID) of the World Bank, which has its headquarters in Washington, D.C., USA.
Following a raid of Nexo’s headquarters at the beginning of the year, four Bulgarian individuals were prosecuted; however, in December 2023, as Cointelegraph previously reported, Bulgarian prosecutors abandoned their case against Nexo, ruling that there was no evidence of crimes committed.At first, the prosecution claimed that between 2018 and 2023, Nexo officials took part in an organized crime group with the goal of making money through cryptocurrency loans.Kosta Kanchev, Antoni Trenchev, Trayan Nikolov, Kalin Metodiev, and other co-founders of Nexo, who are all citizens of Bulgaria, were first accused after the searches in January 2023.One of the reasons the prosecution dropped the accusations was that there was no legal framework regulating cryptocurrency assets in Bulgaria.
On January 18, Nexo filed legal documents with the ICSID via its Swiss company Nexo AG.The organization resolves legal conflicts involving foreign investors and governments.According to Nexo, it has been collaborating with three American banks on an IPO on a significant stock market, with an initial estimated value of $8–$12 billion.Additionally, the business asserts that it was close to finalizing a multiyear agreement with a well-known European football team, which would have given Nexo access to over 330 million supporters globally.According to a statement from Trenchev, Nexo had suffered as a result of the investigation being discontinued, even though the company was still able to operate.
“Our growth path has been slowed down and opportunities lost or significantly delayed. I personally promised 10 months ago that we would explore all legal means available to secure financial compensation for Nexo,” Trenchev said.
According to an additional Reuters article, the Bulgarian finance ministry has confirmed that it has received an arbitration request from the ICSID, which is scheduled for examination.As a result of Nexo’s failure to register the offer and sale of its Earn Interest Product, the U.S. Securities and Exchange Commission and the North American Securities Administrators Association settled cases brought by several U.S. state securities regulators for $45 million after the raid in January.April saw the product’s closure on the platform.
The loan company Nexo announced in December 2023 that it intended to close its activities in the United States; this declaration was followed by the settlement with US regulators.The company’s choice to leave the nation was finally motivated by “a lack of regulatory clarity” in the nation.