Cryptocurrency lending platform Nexo is throwing punches in a financial heavyweight fight, filing a $3 billion lawsuit against Bulgaria.
The company claims the Balkan nation unfairly tarnished its reputation and sunk business deals with a “wrongful” criminal investigation that ultimately went nowhere.
Last year, Bulgarian authorities came knocking, raiding the offices of Nexo and accusing its founders of serious crimes like money laundering and tax fraud.
The company vehemently denied any wrongdoing, but the accusations sent shockwaves through the crypto world.
Fast forward to December 2023, and the plot twist arrives. With no evidence to back their claims, Bulgarian prosecutors threw in the towel, dropping the entire investigation.
However, the damage was done, according to Nexo.
Nexo, which is registered in the Cayman Islands but has a Swiss subsidiary and a Bulgarian office, says that the investigation caused it to lose several business opportunities, such as a planned listing on the U.S. stock market and a sponsorship deal with a soccer team.
Now, they’re seeking a hefty $3 billion payout from Bulgaria to compensate for the alleged losses.
Nexo has submitted its claim to the International Centre for Settlement of Investment Disputes (ICSID), a World Bank institution that handles disputes between foreign investors and states.
The company is also seeking compensation for the losses and damages it suffered, as well as a declaration that Bulgaria violated its obligations under international law.
Bulgaria’s finance ministry said that it received a request for arbitration from the ICSID, and that it would review it and propose the next steps.
The ministry also said that it did not admit any liability or jurisdiction in the case. The prosecutor’s office, which is also named as a respondent in the case, did not comment on the matter.
This legal battle is one to watch, with major implications for both Nexo and the future of cryptocurrency regulation in Bulgaria.
Will the courts side with the lender and award the eye-watering $3 billion? Or will Bulgaria manage to defend its actions?
Only time will tell, but one thing’s for sure: this saga is far from over.
Nexo is one of the leading crypto lending platforms in the world, with over 2 million users and $15 billion in assets under management.
Headquartered in Zug, Switzerland, Nexo also offers a variety of financial services related to cryptocurrencies such as buying and selling crypto, trading crypto and, crypto-backed credit cards.
The firm also allows users to borrow and lend crypto and fiat currencies, as well as earn interest on their deposits.