Nexo AG Files $3 Billion Arbitration Claim Against Bulgaria

KEY TAKEAWAYS

1. Nexo AG, a crypto services provider, has filed an arbitration claim worth over $3 billion against Bulgaria, alleging politically motivated investigation and lost business opportunities.
2. The investigation into Nexo’s activities was dropped in December due to insufficient evidence of criminal behavior, with the company consistently denying any wrongdoing.
3. Nexo seeks compensation for the thwarted plans of a US stock market listing and a soccer sponsorship deal, arguing that the probe tarnished its reputation and destroyed shareholder value.
4. The case has been registered with the International Centre for Settlement of Investment Disputes (ICSID), and Bulgaria’s finance ministry has acknowledged receiving the arbitration request.
5. Nexo, established in 2018, provides a range of crypto services and had plans for a US stock market listing and a soccer sponsorship deal, emphasizing its denial of any wrongdoing and the dismissal of the investigation against it.

Nexo AG, a prominent crypto services provider, has initiated legal action against Bulgaria by filing an arbitration claim worth over $3 billion.

The claim alleges that the investigation conducted by Bulgarian prosecutors was politically motivated and resulted in lost business opportunities and harm to Nexo’s brand reputation.

Background of the Investigation

In January 2023, Bulgarian prosecutors charged four individuals with forming an organized crime group engaged in money laundering and unlicensed banking activities.

The inquiry against Nexo was dropped in December due to insufficient evidence of criminal behavior.

Nexo, co-founded by former Bulgarian lawmaker Antoni Trenchev, has consistently denied any wrongdoing.

The investigation into Nexo’s activities was initially driven by allegations of involvement in an organized crime group operating in multiple countries since 2018, but has since been closed.

Nexo’s Compensation Claims

Nexo is seeking compensation for the thwarted plans of a US stock market listing and a soccer sponsorship deal due to the investigation.

The company argues that the probe tarnished its reputation and destroyed shareholder value.

Nexo had been working with three leading US investment banks on a funding round and an initial public offering on a major US stock exchange.

Additionally, Nexo was days away from signing a multi-year strategic alliance with a major European football club, which would have given the company exposure to the club’s 330,000,000+ supporters.

Legal Proceedings and Response from Bulgaria

The case has been registered with the International Centre for Settlement of Investment Disputes (ICSID) on January 18, and Bulgaria’s finance ministry has acknowledged receiving the arbitration request.

The ministry stated that any communications related to the case should not be seen as an admission of the claims or acceptance of arbitral jurisdiction.

It’s important to note that Nexo’s claim does not imply any admission of guilt on Bulgaria’s part.

Nexo’s Business and Services

Established in 2018, Nexo provides a range of crypto services, including trading, custody, loans, and interest-earning products.

The company had plans for a US stock market listing and a soccer sponsorship deal, with an indicative valuation for the funding round and IPO ranging between $8 billion and $12 billion.

Nexo emphasizes its denial of any wrongdoing and the dismissal of the investigation against it, citing alleged harm caused to its business and reputation as the basis for its legal action.

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