Nexo files claim for $3 billion in damages over dropped criminal investigation

Crypto lending platform Nexo has filed a massive $3 billion arbitration claim against Bulgaria over a criminal investigation against the company which was ultimately dropped.

Nexo submitted the claim to the World Bank’s International Centre for Settlement of Investment Disputes (ICSID) on January 18th, accusing Bulgaria of damaging its business opportunities. 

The suit comes after Bulgarian prosecutors raided Nexo’s offices in early 2023 on allegations of organized criminal activity related to crypto lending but later dropped the charges, citing a lack of evidence and an unclear regulatory framework around digital assets.

Bulgaria’s Finance Ministry has confirmed receiving Nexo’s arbitration request, which will be reviewed based on the country’s legal procedure.

“This or any other communications… shall not be considered in any way an admission as to the substance of any claims or as an acceptance of any arbitral jurisdiction,” the Finance Ministry stated, commenting on the request.

Nexo co-founder Antoni Trenchev had denied claims of money laundering and tax fraud, instead alleging political motivations against him as a former Bulgarian lawmaker. Bulgaria has acknowledged the arbitration request but disputes any admission of liability.

The now-abandoned investigation had initially targeted Nexo co-founders Kosta Kanchev, Antoni Trenchev, Trayan Nikolov, and Kalin Metodiev as part of an alleged criminal group profiting from lending services from 2018 to 2023. While Nexo’s operations continued, the company argues the scrapped probe still negatively impacted planned growth.

Nexo claims it was working on a multi-billion dollar initial public offering in the US and a sponsorship deal with a major European football club during the raids. Nexo co-founder Antoni Trenchev said these opportunities were “lost or significantly delayed” as a result, vowing to take legal action for financial compensation.

The dispute represents the latest regulatory scrutiny for Nexo after paying $45 million to settle US charges in 2023 that it failed to register securities offerings properly. Nexo also decided to cease American operations around the same time, though it maintains substantial lending activity worldwide. The massive claim related to a failed local probe exemplifies intensifying global pressures between crypto firms and state authorities.