Nexo Files $3 Billion Arbitration Claim Against Bulgaria
Cryptocurrency lending platform Nexo has taken legal action against the Republic of Bulgaria, filing an arbitration claim seeking $3 billion in damages. The claim was submitted through the World Bank’s International Centre for Settlement of Investment Disputes (ICSID) in Washington, D.C. Nexo alleges that Bulgaria engaged in wrongful and politically motivated actions against the company.
The Origins of the Conflict
The conflict between Nexo and Bulgaria began with an investigation launched by Bulgarian prosecutors in early 2023. Nexo’s offices were raided over allegations of involvement in an organized criminal group profiting from crypto lending. Four Bulgarian nationals, including Nexo co-founders Kosta Kanchev, Antoni Trenchev, Trayan Nikolov, and Kalin Metodiev, were charged. However, the case was dropped in December 2023 due to a lack of evidence and Bulgaria’s absence of a legal framework for crypto assets.
Impact on Nexo
Nexo claims that the baseless investigation had a severe impact on its business operations and reputation. The company states that it was in the process of working with U.S. banks on an initial public offering (IPO) valued between $8 and $12 billion. Additionally, Nexo was close to finalizing a sponsorship deal with a major European football club. However, both opportunities were lost due to the investigation.
Legal Challenges and Settlement
In addition to the Bulgarian investigation, Nexo faced legal challenges in the United States. The company reached a $45 million settlement with the U.S. Securities and Exchange Commission (SEC) and North American Securities Administrators Association (NASAA) over its Earn Interest Product. As a result, Nexo discontinued the product and wound down its U.S. operations.
Nexo’s Arbitration Claim
Nexo’s legal team, led by U.S. law firm Pillsbury Winthrop Shaw Pittman LLP, argues that the Bulgarian investigation was unjustified and oppressive, causing significant financial and reputational damage. The claim, filed by Nexo’s Swiss subsidiary Nexo AG, aims to recover lost opportunities and damages resulting from the allegations.
Hot Take: Nexo Seeks Justice for Damages
Cryptocurrency lending platform Nexo has taken a significant legal step by filing an arbitration claim against Bulgaria. With allegations of wrongful actions and political motivation, Nexo seeks $3 billion in damages through the World Bank’s International Centre for Settlement of Investment Disputes (ICSID). The conflict arose from a baseless investigation launched by Bulgarian prosecutors, which had a severe impact on Nexo’s business operations and reputation. The company lost out on potential lucrative opportunities and also faced legal challenges in the United States. Now, Nexo is fighting for justice and hoping to recover lost opportunities and damages caused by the allegations.
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