According to Cointelegraph: Crypto lending platform Nexo has filed a $3 billion arbitration claim against the Republic of Bulgaria, alleging that the country's botched criminal investigation caused significant reputational damage and shareholder value loss. The details of the claim were disclosed to Cointelegraph on Jan. 24, having been submitted via the World Bank's International Centre for Settlement of Investment Disputes (ICSID), based in Washington, D.C.
Bulgarian prosecutors withdrew their case against Nexo in December 2023, citing that no evidence was found to link the company and four Bulgarian nationals charged, with the alleged crimes. This follows allegations in early 2023 that Nexo executives had participated in an organized crime group profiting from crypto lending from 2018 to 2023.
According to Nexo, the company was working with three U.S. banks on an initial public offering (IPO) on a significant stock exchange, estimated at a valuation between $8 and $12 billion. It was allegedly also on the brink of signing a multiyear deal with a major European football club, which could have exposed Nexo to over 330 million supporters globally.
Antoni Trenchev, co-founder of Nexo, expressed that the business suffered as a result of the terminated investigation, with slowed growth and significant opportunity delays.
Acknowledgment of a request for arbitration from the ICSID was also reported by the Bulgarian finance ministry, pending review.
Nexo had previously agreed to a $45 million settlement with the U.S. Securities and Exchange Commission (SEC) and North American Securities Administrators Association over its Earn Interest Product's unregistered offer and sale. This followed the company's decision to wind down operations in the U.S., citing a lack of regulatory clarity.
