Switzerland’s financial authority FINMA has launched an investigation into an ICO ran by Envion, a German-Swiss cryptocurrency company. The company is said to have slipped into infighting with accusations of fraud after raising $100 million from an ICO.
As part of the investigations, the regulator has disbanded the company’s board of directors and replaced it with a law firm that is currently running the company. Trado GmbH was appointed to represent the interests of the founder in the company. The company took over after winning an injunction against board member Matthias Woestmann, through his firm Quadrat Capital and the CEO for breach of agreement. The company’s founders have lauded the probe saying it will help both the founders and investors and will also help in protecting ICO proceeds sot that they are not misused.
FINMA has announced that it is yet to contact the founders but was quick to confirm that the company may have acted in violation of the country’s banking regulations. The legal framework guiding the ICO is said to have been developed by Woestmann, assisted by his Swiss lawyer. The regulator says it is reviewing the legal framework to ensure that the company followed regulations before accepting deposits from investors.
The 30-year security was floated in the form of EVN tokens. Both Matthias Woestmann and Marc Gurov, a newly appointed member have been prohibited from acting on behalf of the company without permission from the regulator. The move is aimed at restraining Woestmann from causing further damage to the company’s assets. In a ruling last month, the Berlin Commercial Court restrained the CEO from taking any important action without the consent of the founders.
What the probe is seeking to achieve
In its investigation, FINMA will seek to determine if all listing conditions were fulfilled before issuing the ICO. Additionally, the regulator will probe the qualifications and experiences of the board members to determine if they are qualified to manage the company.
Crackdown on illegal ICOs
FINMA has in the past indicated that it won’t hesitate to crack down on illegal ICO and crypto companies. Last year, the regulator closed down three companies for engaging in illegal crypto business.