Nexo $3 Billion Damage Claim Against Bulgaria

Nexo is seeking $3 billion in damages from the Bulgarian government after unsuccessful criminal investigations were withdrawn.

In the wake of unsuccessful criminal investigations, the cryptocurrency lending platform Nexo is attempting to file a claim for damages against the Bulgarian government for three billion dollars.

Nexo provided an overview of the specifics of their arbitration suit against the Republic of Bulgaria, worth three billion dollars.

It has filed a claim with the International Centre for Settlement of Investment Disputes (ICSID), located in Washington, United States, and is part of the World Bank.

Bulgarian prosecutors withdrew their case against Nexo in December 2023, as reported. Bulgarian prosecutors concluded that four Bulgarian nationals, who were prosecuted during the raid at the beginning of the year, did not commit any crimes.

Prosecutors first asserted that Nexo executives were members of an organized criminal cell that operated between the years 2018 and 2023, intending to make a profit from cryptocurrency loans.

In January 2023, authorities brought forward the first charges against Kosta Kanchev, Antoni Trenchev, Trayan Nikolov, and Kalin Metodiev, all Bulgarian nationals and co-founders of Nexo, following the searches.

The prosecution claimed the absence of a legal framework in Bulgaria encompassing crypto assets as one of the reasons for withdrawing the accusations against the defendant.

On January 18, Nexo submitted legal paperwork to the International Centre for Settlement of Investment Disputes (ICSID) through its Swiss company, Nexo AG.

The institution is responsible for resolving legal issues between nation-states and overseas investors. Nexo reported that it had collaborated with three banks in the United States on an initial public offering (IPO) to be conducted on a major stock market.

The IPO was expected to carry an initial valuation ranging from $8 to $12 billion. Furthermore, the company asserts that it was on the verge of negotiating a multi-year contract with a prominent European football club that remained nameless.

This would have provided Nexo with the opportunity to reach more than 330 million supporters all over the world. Trenchev stated that the abandoned inquiry had caused Nexo to suffer, despite the company being allowed to continue its activities.

The rate at which we are expanding has slowed down, and we have either lost opportunities or significantly delayed them. Trenchev stated that he had personally promised his team ten months ago that they would investigate all legal options that were available to obtain financial compensation for Nexo.

A separate report from Reuters stated that the Bulgarian Ministry of Finance acknowledged receiving a request for arbitration from the International Centre for Settlement of Investment Disputes (ICSID), which is scheduled for review.

In the aftermath of the raid in January, Nexo agreed with the United States Securities and Exchange Commission and the North American Securities Administrators Association to settle a case involving the failure to register the offer and sale of its Earn Interest Product.

This agreement helped resolve cases brought forward by several state securities regulators in the United States. In April, the platform discontinued the offering.

Following an announcement by Nexo in December in which the loan company stated that it intended to complete its activities in the United States, the company reached a deal with the United States regulators.

One of the factors that ultimately led to the company’s decision to leave the United States was what it described as “a lack of regulatory clarity” in the country.