Crypto lending firm Nexo AG and its subsidiaries have filed an arbitration claim of over $3 billion against the Republic of Bulgaria over damages and lost opportunities from the year-long criminal probe by the government into the company and its founders that was abandoned last month.
Nexo, in a press release, said it filed the arbitration claim with the International Centre for Settlement of Investment Disputes (ICSID) in Washington for lost opportunities resulting from what it called "wrongful and politically motivated actions against the company and its executives."
Nexo alleged that it suffered reputational damage and its shareholders lost significant value from the charges that alleged Nexo executives for participating in an organized criminal group from 2018 to 2023 to profit from crypto lending, according to a report on Cointelegraph.
In December 2023, Sofia City Prosecutor's Office cleared Nexo and its management of all wrongdoings and terminated the criminal proceedings against Nexo's management, including co-founders Kosta Kantchev, Antoni Trenchev, and Kalin Metodiev, as well as chief operating officer Trayan Nikolov.
"...Our growth path has been slowed down and opportunities lost or significantly delayed. I personally promised 10 months ago that we would explore all legal means available to secure financial compensation for Nexo. Now that the Bulgarian Prosecutor's Office itself has finally exonerated us, the time is right for us to file our claim and receive reparations for the enormous reputational and financial damage suffered," Antoni Trenchev, co-founder of Nexo, said in a statement.
In its claim, the company alleged that the criminal investigations by the Bulgarian Prosecutor General's Office in January 2023 tarnished Nexo's brand and reputation, resulting in lost business opportunities. It also hurt the company's investments in Bulgaria as well as several planned business activities.
Nexo asserted it had been working with three leading U.S. investment banks on a funding round and an initial public offering on a major U.S. stock exchange, with an indicative valuation between $8 billion and $12 billion.
In addition, the company claimed it was on the verge of signing a multi-year strategic alliance with a major European football club, giving it exposure to its 330,000,000+ supporters across the globe, potentially making Nexo the club's official digital wallet and main partner. Nexo was also working on the roll-out of a club-branded payment card.
"Despite the unjustified attacks by the Bulgarian authorities in January 2023 taking a significant toll on the entire Nexo group, we were able to continue business operations," Trenchev said.
"...We believe that this will be a vindication for Nexo but also for all good actors in the blockchain space that have found themselves under attack from multiple fronts in the past two years," he added.
