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The investigation that is the subject of the entire dispute was launched by the Bulgarian prosecutor’s office in the first months of last year. As part of this process, there were several searches at Nexo’s offices in Sofia and serious allegations against the founders.
According to Bulgarian officials, the founders were involved in money laundering or tax and computer fraud, the Reuters agency reported.
Crypto lending company Nexo will cease operations in the US
Lack of evidence
Ultimately, they couldn’t prove any of the crimes. The Bulgarian prosecutor’s office therefore closed the investigation last December, saying that “there was insufficient evidence to charge criminal activity.” But the whole case was far from over.
Nexo claims in an official statement that the allegations and ongoing investigation alone have had a “devastating impact” on its business, according to the crypto lending company’s official statement. The company was reportedly unable to expand due to investigations into the US stock market.
“Despite the unauthorized attacks by the Bulgarian authorities in January 2023, which caused significant damage to the entire Nexo Group, we were able to continue our business,” said Antoni Trenchev, co-founder of Nexo.
However, according to him, “the growth trajectory has slowed down.” “And some opportunities are completely lost, others are significantly delayed.” I personally promised 10 months ago that we would examine all available legal means to ensure financial compensation for Nexo. Now that the Bulgarian public prosecutor has finally exonerated us, the time has come,” added Trenchev.
At the same time, he emphasized that with the lawsuit he wanted to make it clear to the Bulgarian authorities that they could not victimize companies in a similar way without sufficient solid evidence. “We hope that through our actions we show those in power that their actions have consequences. And we believe that we will prevent such unnecessary destruction of values in the future,” said the co-founder of Nexo.
Arbitration
The case is currently being handled by the International Center for Settlement of Investment Disputes (ICSID), an institution specializing in the resolution of incidents between states and international investors.
The Bulgarian Ministry of Finance has confirmed that it has received an official request from ICSID to initiate arbitration proceedings. The case is currently being handled by a cross-departmental committee tasked with assessing the situation and proposing an appropriate course of action.
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