Nexo Is Suing Bulgaria For Over $3 Billion

After enduring a year of institutional uncertainty, Nexo, a prominent global digital asset institution, is seeking justice through a legal claim exceeding USD 3 billion against the Republic of Bulgaria. The arbitration claim's amount reflects substantial material and reputational damages arising from the government's actions during a now-resolved, oppressive investigation into the company, its employees, and executives. As anticipated, the accusations were found to be baseless, leading to the logical conclusion of pre-trial proceedings due to the absence of any criminal activities.

The claim has been submitted to the secretariat of the International Center for Settlement of Investment Disputes (ICSID) at the World Bank in Washington, aligning with international agreements on investment protection. Nexo's representation before the tribunal will be handled by the esteemed American law firm Pillsbury Winthrop Shaw Pittman LLP.

On December 21, 2023, less than a year after a high-profile operation and subsequent administrative and institutional challenges, all charges were dropped. The Sofia City Prosecutor's Office determined that "no crimes were committed" and closed the criminal proceedings against Nexo's leaders – Kosta Kanchev, Antoni Trenchev, Kalin Metodiev, and Trayan Nikolov, unequivocally exonerating them.

The direct aftermath of the authorities' actions, coupled with a significant media campaign against the company and widespread dissemination of false statements, inflicted substantial damage on Nexo's operations and international standing. The company's investments in Bulgaria incurred significant losses, and lucrative global business prospects were forfeited:

• Nexo's collaboration with three major American investment banks on the initial public offering (IPO) of the company's shares on a prominent U.S. stock exchange was terminated. The banks had valued Nexo between USD 8 billion and USD 12 billion at the time.

• A prospective long-term partnership with one of Europe's premier football clubs, boasting over 330 million supporters globally, fell through. The collaboration aimed to create an exclusive financial product providing access to digital assets for millions of football fans.

The tarnished reputation of Nexo and its employees, fueled by proven false claims, resulted in the loss of numerous business opportunities, potential revenues, and a multibillion-dollar drop in the company's value.

"While the Bulgarian authorities' attacks in January 2023 took a toll on Nexo, we managed to sustain the business," stated the company's management. "However, our rapid growth was significantly impeded. Many years of effort were irreversibly damaged, and we missed unique opportunities that will be challenging to replicate. Now, with the Bulgarian Prosecutor's Office clearing Nexo, it's time to demand justice and compensation for the substantial reputational and financial damages incurred. Through our actions, we aim to demonstrate that power and responsibility are inseparable, and such arbitrary actions cannot go without consequences. This will serve as a long-awaited and just rehabilitation for Nexo and its employees, as well as a crucial step toward a more transparent and conducive environment for the state's development, benefiting both Bulgarian business and society."

Nexo intends to allocate up to 20% of the compensation received to support the most vulnerable and neglected sectors in the country – children's healthcare and education. The primary focus will be on assisting in the construction of much-needed children's hospitals and departments in Bulgaria, along with various initiatives to enhance the global competitiveness of Sofia University "St. Kliment Ohridski" in education.

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