Why Is Crypto Lender Nexo Seeking $3bn From Bulgaria?

Written by

Eddie Mitchell

Cryptocurrency Writer

Following a year-long legal battle with local authorities, crypto lender Nexo is seeking $3billion in damages from Bulgaria, according to an official press release today, 24 January 2024.

Nexo sues Bulgaria

Following the termination of legal proceedings on 21 December 2023, Nexo filed a “$3 billion arbitration claim against the Republic of Bulgaria” the release reads

Nexo was cleared of all charges, but claim it has cost them significantly in significantly in opportunities are seeking recuperation for damages and other losses. 

“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,” said Trenchev, the co-founder of Nexo. “However, 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."

Notably, Nexo is claiming that it has lost funding rounds with three leading US banks, multi-year partnerships with a major European football club, and other “lucrative business opportunities were lost” as a direct result of the “wrongful and politically motivated actions against the company and its executives.”

The story so far

At the beginning of 2023, Nexo found itself in hot water when the Bulgarian Prosecutors Office launched an investigation into the firm on suspicion of numerous crimes such as tax offences, embezzlement, money laundering, computer fraud, and banking without a licence.

As reported by local media outlets at the time, the Prosecutor General’s Spokesperson, Siika Mileva, noted that Nexo had handled close to $100bn in assets over last few years, and that there were concerns relating to the activities of some of its clients. 
Other legal troubles came in the form of lawsuits against Nexo, including one that accuses Nexo of manipulating trading activity by “freezing account and forcing clients to sell at prices far below market levels".

In December 2023, the Prosecutors Office announced that the Nexo investigation had been closed due to a “lack of crime”, citing lack of evidence to support the allegations, and all charges were subsequently dropped, discontinuing all legal proceedings.

Interestingly, a lack of regulations were also cited in the defendants favor, with there being no formal legislation or law surrounding the crypto products or services.

As its crypto and Nexo aren’t regulated as legal tender or recognized as a financial instrument respectively, laws on payment services do not apply, neither do provisions on investment services.