Nexo, a leading crypto lender, is seeking $3 billion in damages from Bulgaria, citing a halted criminal investigation that severely impacted its expansion plans. The move intensifies tensions between the crypto sector and traditional state regulations.
The investigation, initiated by Bulgarian prosecutors in January 2023, involved serious charges like money laundering and computer fraud.
Despite the case being dropped due to insufficient evidence, Nexo alleges reputational damage and financial losses.
The company approached the World Bank’s ICSID for compensation, marking an unprecedented legal challenge in the crypto industry. Nexo also faces regulatory issues, including a $45 million SEC fine.
Nexo, responding to Bulgaria’s investigation, labeled it a “politically motivated attack” and asserted that it caused substantial reputational harm, missed business opportunities, and disrupted crucial financial plans.
The impact included setbacks in a funding round and a potential $12 billion IPO on a US stock exchange. Nexo also claimed the investigation resulted in the loss of a multi-year strategic partnership with a major European football club.
This partnership would have designated Nexo as the club’s digital wallet provider, granting access to the team’s vast global fanbase, exceeding 330 million supporters.
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