FINMA Launches Proceedings Against $100 Million ICO

Switzerland’s financial regulator, the Swiss Financial Market Supervisory Authority (FINMA), has announced that it has launched proceedings against initial coin offering (ICO) issuer, Envion AG.

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FINMA Launches Proceeding Against $100 Million ICO

A press release published by the Swiss Financial Market Supervisory Authority has revealed that the regulator has initiated enforcement proceedings against Envion AG.

Finma states that it has “evidence that the company may have breached financial market law in relation to an ICO.” The press release states that the proceedings will focus “in particular on possible breaches of banking law resulting from the potentially unauthorized acceptance of public deposits in connection with the Initial Coin Offering (ICO) for the EVN token.”

“Investigations carried out by FINMA to date indicate that, in the context of its ICO, Envion AG accepted funds amounting to approximately one hundred million francs [approximately $100.6 million USD] from more than 30,000 investors in return for issuing EVN tokens in a bond-like form,” the release continues.

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Envion AG’s whitepaper opens with a legal disclaimer stating that “Neither the Swiss FINMA nor the United States Securities and Exchange Commission nor any other foreign regulatory authority has approved an investment in the tokens.”

The disclaimer adds that “The EVN token can be categorized as a security as it entitles token holders to receive the profits from mining operations. The token is, as such, subject to certain restrictions under US security laws. The Envion ICO is compliant with these rules and restricts access for US-citizens, greencard holders and residents of the US to the category of “accredited investors”, pursuant to the US Security Act Regulation D Rule 506 (4).”

In May, The New York Times published an article claiming that Envion was “melting down, with its creators accusing one another of fraud” following the apparent loss of control over the company on the part of its founders.

The Swiss Financial Market Supervisory Authority added that it “will make no further comment on the proceedings until they are concluded.”

What are your thoughts on FINMA’s decision to launch proceedings against Envion? Share your thoughts in the comments section below!

Images courtesy of Shutterstock, finma.ch

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