Nexo demands $3 billion from the Bulgarian prosecutor’s office for damage to its reputation by a criminal investigation

A crypto lending company appealed to the international arbitration institute, ICSID

24.01.2024 - 13:55

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What’s new? Crypto lender Nexo has demanded $3 billion in damages from Bulgarian authorities for damage to its reputation and a drop in shareholder value as a result of a criminal investigation into its activities. Nexo claims the actions of Bulgarian prosecutors derailed its plans to list on a US stock exchange, as well as a sponsorship deal with an unnamed football club.

Reuters’ material

What else is known? Nexo AG, a Swiss unit of Cayman Islands-based Nexo Capital, has appealed to the International Centre for Settlement of Investment Disputes (ICSID). This international arbitration institution, headquartered in Washington, D.C., handles disputes between private investors and states.

The Bulgarian Ministry of Finance confirmed receipt of the request for arbitration from ICSID, it will be considered by a specialized inter-ministerial committee to form further steps.

Bulgarian prosecutors launched an investigation into Nexo AG in January 2023, searching its offices in Sofia and charging its founders with crimes including participation in an organized crime group for money laundering and tax fraud.

However, the case was dropped last month for lack of evidence. Prosecutors said there was no legal framework for crypto services in Bulgaria.

Nexo co-founder and former Bulgarian National Assembly member Antoni Trenchev denied wrongdoing and claimed that the investigation was politically motivated. This view was already rejected by the prosecutor’s office.

At the same time, last year, Nexo ceased operations in the United States and agreed to pay $45 million to settle charges by the federal Securities and Exchange Commission (SEC) and state regulators for failing to register crypto lending products.

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