The crypto lending company said the now-dropped charges damaged its reputation and brand.
Crypto lending firm Nexo seeks $3 billion in damages from Bulgaria over a now-dropped criminal investigation The company said on Jan. 24 that it is seeking $3 billion in damages from Bulgaria.
The company said in a statement:
“Nexo has filed an ICSID arbitration claim for more than $3 billion against the Republic of Bulgaria for damages and lost opportunities resulting from the State’s misguided and politically motivated actions…involving an unwarranted and oppressive criminal investigation that was later dropped for lack of factual basis.”
Bulgarian prosecutors first opened an investigation into Nexo AG a year ago in January 2023. At the time, authorities raided the company’s offices and charged four Bulgarian individuals with money laundering, tax evasion, and computer fraud. Authorities also alleged violations of Russian sanctions.
In its latest press release, Nexo stated that the company and its management were exonerated on December 21, 2023. However, it stated that the charges damaged its brand and reputation, hurt investments in Bulgaria, and resulted in the loss of several planned business opportunities.
The company has filed an arbitration application with the World Bank’s International Centre for Settlement of Investment Disputes (ICSID). ICSID records show that Nexo filed the application on January 18, but provided few details.
According to a separate report from Reuters, the Bulgarian Ministry of Finance confirmed that it had received the ICSID arbitration request and said that the request would be reviewed by an inter-ministerial committee. However, the Bulgarian Ministry of Finance said that recognizing the request did not mean accepting Nexo's claims or accepting any arbitration jurisdiction.
Nexo’s growth suffers
Nexo co-founder Antoni Trenchev confirmed the company could continue to operate but said it would experience slowed growth. Nexo noted that it had been working with three large U.S. investment banks on a funding round and IPO that could have valued it at $12 billion. It said that effort had to be abandoned because of the allegations.
Nexo also said the allegations emerged days before the company planned to sign a multi-year partnership with a European soccer club that included a club-branded payment card. Although Nexo did not reveal the club in question, reports of a possible partnership between Nexo and FC Barcelona surfaced in October 2022, months before the investigation began. #Nexo #调查索赔