Crypto lending firm Nexo has filed a $3 billion arbitration claim against the Republic of Bulgaria after the government wrapped up a year-long criminal investigation into the company and its founders last month.
In a Wednesday press release, Nexo argued that Bulgaria’s "unjustified" and "politically motivated" investigation tarnished the firm’s reputation, and cost it billions in lost business opportunities that were otherwise just around the corner (Disclosure: Nexo is one of 22 investors in Decrypt).
“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,” wrote Antoni Trenchev, co-founder of Nexo, in an accompanying statement.
In one example, the company said it was working on a funding round with three leading U.S. banks, and an IPO on a major U.S. stock exchange. Despite boasting an indicative valuation of at least $8 billion, those plans had to be abandoned due to the lawsuit.
Nexo also claimed it was finalizing a strategic alliance with a major European football club, which would have ushered in a club-branded crypto payment card.
“By our actions, we hope to show to those in power that actions have consequences and hopefully prevent such unnecessary value destruction going forward,” Trenchev added.
“This isn't a case against Bulgaria. It's a fight to prevent the kind of unjust actions we've experienced from happening to anyone else," he added in a translated Facebook post later that day.
The Bulgarian prosecutor’s office launched its investigation into Nexo last January, conducting a high-profile raid on the company’s offices at the time.
Yet after months of monitoring, seizures, interviews, and forensic audits, the government admitted that it could produce “no evidence” that Nexo’s founders operated an “organized criminal group” guilty of money laundering, tax crimes, and the like.
While clearing Nexo of wrongdoing, the Prosecutor's Office noted that virtual assets are not regulated in Bulgaria, nor are they “recognized as money, deposits, or other recoverable funds in any EU country.”
Last year, Trenchev argued that the investigation and attack against its offices was “politically motivated” from the start, with the intention of harming the reputation of a competing political party that had received donations from several Nexo employees.
Edited by Andrew Hayward