Unfounded Accusations Have Their Price. This is the belief of the international company Nexo, based in London, which is demanding $3 billion in compensation from the Bulgarian government for the cancellation of the investigation. In its opinion, the actions of the Bulgarian services have seriously damaged its reputation and brand.
Nexo, a company specializing in providing cryptocurrency loans, found itself in the crosshairs of Bulgarian investigators in January 2023. The Bulgarian authorities, raiding the company’s offices, charged four Bulgarian citizens with money laundering, tax fraud, and computer fraud. Additionally, Nexo was accused of violating sanctions imposed on Russia.
On December 21, 2023, all charges against the company and its board were withdrawn, and the investigation was closed due to lack of evidence. Despite the acquittal, Nexo stated that the whole situation had damaged its reputation, invested funds in Bulgaria, and contributed to the loss of planned business opportunities.
In response to these events, Nexo filed for arbitration at the International Centre for Settlement of Investment Disputes (ICSID), part of the World Bank. The company is demanding $3 billion in compensation from the Republic of Bulgaria, arguing that these actions were politically motivated and unjustified.
The Bulgarian Ministry of Finance confirmed the receipt of the arbitration application from ICSID but stated that the mere acceptance of the application does not mean the acceptance of Nexo’s accusations or the granting of arbitration jurisdiction.
Nexo emphasizes that the legal dispute has significantly affected their operations. The company had planned cooperation with three major investment banks in the USA for a funding round and an initial public offering (IPO), which could reach a valuation of up to $12 billion. Unfortunately, these plans had to be abandoned due to the charges.
Additionally, the company was close to signing a multi-year cooperation with a European football club, which would include a club payment card. Although Nexo did not disclose the name of the club, the media speculated about potential cooperation with FC Barcelona before the investigation began.
The Nexo case shows how delicate and complicated the relationships between innovative companies and countries’ legal systems can be. Although cryptocurrency technology opens new horizons, it also brings new challenges and legal issues. This story is a warning for other companies in the industry that even the most innovative ideas and businesses must contend with legal and political realities.
