Cryptocurrency lending platform Nexo is seeking a substantial $3 billion in compensation from the Bulgarian government following a failed criminal investigation. This was confirmed in a direct communication on January 24. Nexo has taken this issue to the International Center for Settlement of Investment Disputes (ICSID) in Washington, DC, a part of the World Bank, for arbitration.
The claim arises after Bulgarian prosecutors dropped charges against Nexo in December 2023. The charges, initially leveled following a raid on Nexo's offices earlier in the year, accused Nexo executives and four Bulgarian nationals, who are also co-founders of the company, of being involved in an organized crime ring focused on cryptocurrency lending profits from 2018 to 2023. The dropping of charges was partly attributed to Bulgaria’s inadequate legal framework for crypto assets.
Nexo, through its Swiss subsidiary Nexo AG, filed the legal documents with ICSID on January 18. The company alleges significant financial damage due to the investigation. Despite the dropped charges, Nexo contends that its business growth was hampered, leading to missed or delayed opportunities.
In terms of its business ventures, Nexo claims to have been in the process of preparing for an initial public offering (IPO) in collaboration with three U.S. banks, aiming for a valuation between $8 and $12 billion. Additionally, the company was reportedly nearing a deal with a major European football club, which would have provided access to a fanbase of over 330 million people worldwide.
The situation with the Bulgarian government is not Nexo's only recent legal challenge. In January, the company agreed to a $45 million settlement with the U.S. Securities and Exchange Commission (SEC) and the North American Securities Administrators Association regarding the unregistered sale of its interest-earning products. This settlement resolved multiple cases brought by state securities regulators in the U.S. Following this, in December 2023, Nexo announced plans to wind down its U.S. operations, citing "regulatory uncertainty" as the primary reason.
