Switzerland’s finance watchdog has found that the cryptocurrency mining firm Envion AG, which raised millions through an initial coin offering (ICO), held the sale illegally and “seriously violated” laws.

Announcing the news on Wednesday, the country’s Financial Market Supervisory Authority (FINMA) said that Envion unlawfully received public deposits worth over 90 million francs ($90.33 million) from at least 37,000 investors through its token offering early in 2018.

FINMA began investigating Envion in July 2018 for potentially breaking financial market rules. In Wednesday’s statement, the regulator concluded that Envion carried out the offering without the necessary banking license in place.

Envion issued EVN tokens to investors who made payments in U.S. dollars and cryptocurrencies such as bitcoin and ether, and granted them a claim to repayment after 30 years, FINMA said.

This acceptance of public deposits and “bond-like” arrangement falls under the country’s Banking Act and thus requires a banking license, according to the watchdog.

Furthermore, the conditions under which Envion issued its tokens were not equal for all investors, FINMA added. Its prospectus also did not meet minimum statutory requirements and an internal audit unit was not set up as required by law.

It was reported last May that the firm’s CEO, Matthias Woestmann, had claimed that the founders generated extra EVN tokens as part of a money grab. The founders counterclaimed that Woestmann had seized control of the firm and breached his contract.

Envion has been forced to undergo liquidation proceedings by the Swiss Cantonal Court of Zug, which found “organisational shortcomings.” FINMA said it would not be taking supervisory action against the firm as a result.

It is not yet clear if and how investors in the project might be able to claim back their funds. FINMA indicated it is not able to provide information on Envion’s financial state, as the bankruptcy proceedings are controlled by the Bankruptcy Office of Zug.

FINMA said it will continue to take action against unlawful ICOs that “violate or circumvent supervisory law.”

Swiss flag image via Shutterstock