Executive Summary
- The case concerns complex litigation between co-founders of the Nexo Group, a crypto-asset lending platform valued at over US$4 billion.
- Disputes center on ownership shares, founder token allocations, and control of cryptocurrency assets.
- Two overlapping proceedings: Iankov Proceedings (CL-2024-000062) and Shulev Proceedings (CL-2020-000392), with overlapping parties and claims.
- Key defendants include Mr. Kantchev (registered sole legal owner), Nexo Capital Inc, and related entities.
- Claims allege breaches of informal shareholding agreements and misappropriation of founder tokens and crypto assets.
- The Court is addressing jurisdictional challenges, strike-out applications, and consolidation requests.
Sanctions Highlights
- Sanctions implications arise due to the involvement of entities registered in multiple jurisdictions: UK (NPEM Ltd), Cayman Islands (Nexo Inc), Switzerland (Nexo AG), and Bulgaria.
- No direct designation of individuals or entities under sanctions is stated, but the complex cross-border structure raises compliance risks.
- The UK and EU sanctions regimes may impact enforcement and asset recovery given Nexo’s UK-registered entities and token distribution.
- The case highlights risks of sanctions evasion through crypto assets and offshore corporate structures.
Emerging Risks
- Potential for further disputes over crypto-asset custody and founder token ownership amid unclear governance.
- Risk of asset dissipation or concealment via hardware wallets and offshore accounts.
- Jurisdictional challenges may delay resolution and complicate enforcement.
- Increasing regulatory scrutiny on crypto platforms in the UK, EU, and US may affect Nexo’s operations and litigation outcomes.
- Possible reputational damage to involved parties amid allegations of conspiracy and misappropriation.
Geopolitical Impact
- The case involves multiple jurisdictions: UK (court venue, NPEM Ltd), EU (Bulgaria, Switzerland), US (Delaware incorporation), Cayman Islands, Mongolia, and UAE (jurisdictional and operational links).
- Reflects growing international legal complexity in crypto disputes involving cross-border ownership and control.
- Highlights the UK’s role as a key forum for resolving international crypto-related commercial disputes.
- Potential influence on regulatory approaches in the EU and UK regarding crypto-asset governance and founder rights.
- May impact bilateral business relations and enforcement cooperation between involved countries.
Economic Intelligence
- Nexo Group’s valuation exceeds US$4 billion, underscoring significant economic stakes.
- Founder token allocations represent over 11% of issued tokens, with substantial profit-sharing rights.
- Disputes threaten operational stability and investor confidence in Nexo’s crypto lending platform.
- Litigation costs and delays could affect Nexo’s market position and capital raising.
- The case exemplifies risks in crypto start-ups lacking formalized shareholder agreements and governance structures.
Strategic Recommendations
- Parties should prioritize consolidation of proceedings to avoid duplicative litigation and conflicting judgments.
- Conduct thorough due diligence on cross-jurisdictional sanctions compliance, especially regarding UK and EU regimes.
- Secure and audit all crypto assets and hardware wallets to prevent loss or misuse.
- Consider mediation or arbitration to expedite resolution given the complex factual and jurisdictional issues.
- Regulators and investors should monitor governance practices in crypto ventures to mitigate similar disputes.
- Legal teams should prepare for evolving regulatory scrutiny in crypto asset management across involved jurisdictions.
---
**Source Notes:**
Sanctions Intelligence Digest | [https://empyreanprotocol.com/litigation/view/www.bailii.org/ew/cases/EWHC/Comm/2025/495.html](https://empyreanprotocol.com/litigation/view/www.bailii.org/ew/cases/EWHC/Comm/2025/495.html)