- Nexo says the investigations tarnished its reputation and hampered its growth.
- Bulgarian authorities dropped the Nexo case in December 2023, citing a lack of evidence.
In one of today’s biggest cryptocurrency news, Nexo, a leading crypto lender that is reportedly seeking $3 billion in damages from Bulgaria.
Specifically, as Reuters reported on Wednesday, Nexo AG, a Swiss arm of Nexo Capital, says last year’s aborted criminal investigation completely destroyed the company’s expansion plans, including a potential US listing.
Nexo files for arbitration with ICSID
Nexo, in a filing with the World Bank’s International Centre for Settlement of Investment Disputes (ICSID), says Bulgaria’s investigation tainted its reputation. It also wrecked shareholder value.
As CoinJournal highlighted in December 2023, the Bulgarian prosecutor’s office announced a termination of the criminal investigations against Nexo and four of its executives, citing a lack of evidence.
The prosecution’s move followed nearly a year of investigations, with police having raided Nexo’s offices in the country’s capital Sofia in January 2023. Among the allegations levelled against the crypto lender and its top executives were money laundering, computer fraud and unauthorised banking activities.
Despite the dropped case, Nexo contends the damage from the raids and allegations was immense. It filed for arbitration with the ICSID on January 18. Reuters reports that Bulgaria’s finance ministry has acknowledged receipt of an arbitration request from the ICSID.
While officials say an inter-departmental committee will review this request and propose next steps, this does not constitute an “admission as to the substance of any claims or as an acceptance of any arbitral jurisdiction.”
ICSID, based in Washington, USA, is an international arbitration institution that handles disputes between countries and international investors. Some of the countries ordered to pay significant damages to companies include Pakistan, Ecuador, and Venezuela.