Nexo seeks $3 billion in damages for canceling Bulgarian investigation.

The crypto lender says the now-dropped charges damaged its reputation and brand.

Crypto lender Nexo is seeking $3 billion in damages from Bulgaria over a canceled criminal investigation. The company said on January 24 that it would seek $3 billion in damages from Bulgaria.

The company said in a statement:

“Nexo has filed an ICSID arbitration claim against the Republic of Bulgaria in excess of $3 billion for damages and lost opportunities caused by the country’s wrongful and politically-motivated actions …… involved an unfounded and oppressive criminal investigation, which was later summarily dismissed for lack of factual basis withdrawn.”Bitcoin Miner

The Bulgarian prosecution first opened an investigation into Nexo AG a year ago in January 2023 . At that time, authorities raided the company’s offices and charged four Bulgarian individuals with money laundering, tax evasion and computer fraud. Authorities also claimed violations of Russian sanctions.

In its latest press release, Nexo said the company and its management were cleared of the charges on December 21, 2023, it said. However, it said the allegations had damaged its brand and reputation, harmed investments in Bulgaria and resulted in the loss of several planned business opportunities.

The company has filed a request for arbitration with the World Bank’s International Center for Settlement of Investment Disputes (ICSID).ICSID records show that Nexo filed the request on January 18, but provide few details.

According to an independent report by Reuters, Bulgaria’s finance ministry confirmed it had received the ICSID’s request for arbitration and said it would be examined by an interdepartmental committee. However, the Bulgarian Ministry of Finance said that recognizing the request did not imply acceptance of Nexo’s claims or acceptance of any arbitration jurisdiction.ETC mining

Nexo’s growth impacted

Antoni Trenchev, co-founder of Nexo, confirmed that the company could continue to operate, but said it would experience slowed growth.Nexo noted that it had worked with three large US investment banks on a funding round and IPO that could have resulted in a valuation of $12 billion. It said that effort had to be abandoned due to the allegations.

Nexo also said the allegations came days before the company planned to sign a multi-year partnership with a European soccer club that included a club-branded payment card. Although Nexo did not disclose the club in the partnership, in October 2022, months before the investigation began, there were reports of a possible partnership between Nexo and FC Barcelona.