Nexo seeks $3 billion in damages from Bulgaria in ICSID arbitration after Bulgarian prosecutors dropped all charges in a case against the company that marred its activities for most of last year.
Nexo AG, along with its subsidiaries, has launched a $3 billion arbitration claim against the Republic of Bulgaria, alleging wrongful and politically motivated actions by the country. The claim, filed at the World Bank’s International Centre for Settlement of Investment Disputes (ICSID) in Washington, DC, seeks compensation for damages and lost opportunities caused by unjustified criminal investigations against the company and its executives.
The Sofia City Prosecutor’s Office cleared Nexo and its management of all charges on December 21, 2023, concluding that no crimes had been committed. This exoneration came after a series of allegations by the Bulgarian Prosecutor General’s Office in January 2023, which Nexo claims severely damaged its brand and reputation, leading to significant financial losses.
Deborah Ruff, head of arbitration at Pillsbury Winthrop Shaw Pittman LLP, the U.S. law firm representing Nexo, expressed confidence in representing the clients in this legal battle. Matthew Oresman, Managing Partner of Pillsbury’s London Office, also affirmed the strength of Nexo’s claim.
The allegations against Nexo had far-reaching consequences, derailing several major business initiatives. These included a funding round and an initial public offering on a major US stock exchange, valued between $8 billion and $12 billion, and a strategic alliance with a major European football club. This partnership, which was close to being finalized, would have positioned Nexo as the club’s official digital wallet and main partner, including the launch of a club-branded payment card.
Antoni Trenchev, co-founder of Nexo (and himself a former member of the Bulgarian parliament), stated that despite the challenges posed by the Bulgarian authorities, the company continued its operations but faced slowed growth and delayed opportunities. With the Bulgarian Prosecutor’s Office now exonerating them, Trenchev emphasized the importance of seeking reparations for the reputational and financial damage suffered.
With the crypto ‘earn’ sector under intense legal pressure worldwide, he expressed hope that this legal action would serve as a vindication for Nexo and a message to authorities about the consequences of such actions against blockchain entities.
Despite its legal challenges, Nexo continues to offer the highest deposit rates for stablecoin investors of all major companies operating in the earn sector.
