Cryptocurrency-based financial services company Nexo has filed a case against Bulgaria in an international arbitration court in the USA, according to investigative website “Bird.bg” This move comes after the Bulgarian prosecutor’s office dropped its investigation into Nexo, citing insufficient evidence of a crime.
Details of the dispute, filed on January 18 with the International Center for Settlement of Investment Disputes (ICSID), are not fully clear from the announcement. The Bulgarian companies “Mirastar” and NDS, part of the Nexo group, are listed as plaintiffs, while the Ministry of Finance and the Prosecutor’s Office of the Republic of Bulgaria are named as defendants.
ICSID, part of the World Bank Group, facilitates dispute resolution through conciliation, arbitration, or fact-finding in investor-state disputes. Nexo’s legal action follows the prosecutor’s decision to abandon the investigation that began with high-profile searches and accusations.
In December 2023, Antoni Trenchev, one of Nexo’s founders, revealed that the dropped investigation might cost the state millions. Trenchev warned that the company was assessing the damage caused by the prosecution, estimating it at over billion. Though he initially considered going to the European Court of Human Rights in Strasbourg, Nexo has now opted for an international arbitration case in the USA.
Trenchev and his partner, Kosta Kanchev, faced accusations related to unauthorized banking transactions through the Nexo online platform. These transactions involved lending and deposit activities without the appropriate authorization under the Law on Credit Institutions. Despite the initial accusations, the supervising prosecutors concluded that there was insufficient evidence of a crime after interviews and examinations.