Switzerland's financial regulator said it is investigating Envion for potential wrong-doing surrounding an $100 million initial coin offering earlier this year. The firm's backers are in a heated dispute with each other.
It is one of the first major investigations for Finma in the coin space: the Swiss financial regulator is investigating Zug-based Envion in an enforcement proceeding. «Finma has evidence that the company may have breached financial market law in relation to an ICO [initial coin offering]», the Bern-based regulator said in a statement on Thursday.
Envion's backers and management have been infighting since shortly after the firm took in 100 million Swiss francs ($100.7 million) earlier this year. The firm is one of countless crypto providers which have flocked to Switzerland to make use of token-friendly regulation and favorable legal status.
It is also the second firm to be ensnared in a high-profile spat over control: Tezos' «Tezzie» coin project was mired in months of infighting over control of a Swiss foundation set up to govern more than $200 million in ICO proceeds.
Secret Tokens Issues?
On Thursday, Finma said it is looking into whether Envion violated banking law by taking public deposits. Initial findings indicate Envion took more than 100 million francs from 30,000 people in return for issuing tokens akin to bonds, Finma said. Envion CEO Matthias Woestmann (pictured below) didn't respond to a request for comment.
Laurent Martin, who speaks for Envion's founders, said the group is confident that Finma will find their conduct to be in accordance with regulations. He added that none of the founders have been in touch with a representative of Finma.
«Regulators have a valuable role in enforcing the rights of token holders and the founders are eager to see Finma use its authority to protect investors», said Michael Luckow, CEO of Trado, which represents the interests of the founders.
The regulator didn't directly address the spat that has been brewing for months between Envion's founders and backers, CEO Woestmann and an outside provider, Trado GmbH, which had been involved in the ICO. The skirmish is over control of the company, and includes accusations of enrichment through secretly issuing additional tokens without investors knowing.
Finma has been less vocal than regulators in other finance hubs like Singapore about warning investors off ICOs. The Swiss overseer has also taken a more receptive approach to crypto business than, for example, the U.S. securities regulator – a boon for the glut of providers in Switzerland's crypto valley.
