Crypto Firm Nexo Demands $3 Bln Settlement From Bulgaria After Probe Fallout

The Swiss-based crypto lender, Nexo AG, a subsidiary of Nexo Capital in the Cayman Islands, is seeking $3 billion in damages from Bulgaria over an abandoned criminal investigation. The company alleges that the inquiry initiated in January 2023 damaged its reputation and shareholder value. In addition, the organization claimed that the probe disrupted its plans for a U.S. stock market debut and a soccer sponsorship deal.

Nexo Asks For $3 Billion Compensation

Recently, Nexo AG filed a document with the World Bank’s International Centre for Settlement of Investment Disputes (ICSID). According to the latest legal filing, the institution stated that the investigation had tarnished its reputation and destroyed shareholder value.

“This or any other communications shall not be considered in any way an admission as to the substance of any claims or as an acceptance of any arbitral jurisdiction,” responded Bulgaria’s Finance Ministry, acknowledging the ICSID’s arbitration request. The ministry emphasized that further review would be conducted by a specialized inter-departmental committee before proposing the next steps, per a Reuters report. Whilst, the prosecutor’s office, which is also a respondent in the case remained silent on the matter.

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About Probe Initiated By Bulgaria

In January 2023, Bulgarian prosecutors launched an investigation into Nexo AG, accusing its founders, including former Bulgarian lawmaker Antoni Trenchev, of offenses such as participating in an organized crime group, money laundering, tax fraud, and computer fraud. The case was dropped last month due to a lack of evidence and the absence of a legal framework for crypto asset services in Bulgaria.

Nexo had refuted the claims of wrongdoing and accused that the probe was influenced politically, according to a report by local news agency BTA. The company’s Co-Founder, Trenchev, has consistently maintained a clear stance on their innocence. The ICSID, an international arbitration institution, registered the case on January 18. However, the specific details about the damages sought remain unconfirmed.

As the arbitration proceedings unfold, Nexo aims to address what it perceives as significant damage to its business and reputation resulting from the halted investigation in Bulgaria. The $3 billion damages claim reflects the severity of the allegations against Nexo. In addition, it sets the stage for a complex legal battle between the cryptocurrency lender and the Bulgarian authorities.

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