Envion ICO Cryptocurrency Scam Over Total Token Circulation Supply Issue
The Envion ICO Scandal: The Two Sides of The Coin
In January 2018, Envion ICO entered the list of the ten largest ICO and even crowdfunding campaigns in history, raising $100 million dollars. But not everything went as expected….
Aiming to disrupt and democratize the kryptonite mining industry with state-of-the-art mobile mining units and a team of experts, the Swiss-run project appeared to be destined for big things, according to reports, closing deals with IBM and Dubai’s leader.
Obviously, things have not gone according to plan. The team says that the agreements failed and that the objectives outlined for investors are far from being met, nor is it clear whether this will ever be met.
The company has been embroiled in a massive scandal in which the founders and the CEO confront each other, accusing each other of fraud. The company, which should already be paying dividends to investors, is stuck and investors are screaming for their money back in social media.
CEO’s Facts Version
Chief Executive Matthias Woestmann, a man who financed one of the largest solar-powered operations in Germany, says the founders fraudulently created more than 40 million additional tokens to enrich themselves without the board's knowledge, while the founders claim that Woestmann illegally seized the company and refused to burn the tokens that were in his possession.
After his statements, Woestmann went on to say that investors had created a new token to cancel the value of the old tokens and thus be able to pay investors the dividends they are owed when they start operations.
After two months of silence he addresses the community exclaiming:
“I could not go to the public with these problems without having a solution,”
The CEO said that Switzerland's financial regulator has been informed of his version of events and that a criminal complaint has been filed in Germany. From his side, it is proposed to replace the old Envion tokens with a new token that will carry all the payment rights of the users.
He also added that only $50 million of the funds raised were available, claiming that the founders lied about the amount of money raised. And regarding operations, he explains that mass production has not started yet.
What Else Do We Know?
Michael Luckow, team leader of the founders, has a very different story to tell. The names and credentials of the founders have been removed from the team page on the Envion website, but they have launched their own site to reach their investors directly through a series of blog entries and video updates.
“In the wake of his legal troubles, Mr. Woestmann has reinterpreted the ICO prospectus, its guiding legal document, to exclude tokens sold to pre-sale investors from the greater pool of sale tokens.”
The founders say that Woestmann cut off contact with them and then informed them in a meeting that he was taking total control of the company. This action could be considered an “analog hacking” in the world of an ICO in which the funds were sequestered illegally without entering the cryptocurrency wallets.
They accuse Woestmann of illegally acquiring a majority stake in Envion AG and are now suing the company.
They allege that Woestmann had pushed for an agreement on behalf of the convenience of the CEO controlling the actions of the founders to accelerate the decision making for the initial creation of the company and transfer them to another joint venture called ‘Trado GmbH’ shortly before the ICO. But the latter did not comply with the founders' request to transfer shares and issued more shares covertly through a capital increase that left them with only 33% ownership.
According to the founders, Woestmann is responsible for not burning additional unallocated tokens after the ICO ended despite being part of the investor's proposal. They sent emails dated May 3rd to Woestmann requesting that at least 5 million tokens to be burned as a sample in good faith, without any response from Woestmann in the email and without any public explanation at the moment.
“We are ready to build the product. Containers should be rolling off the assembly line and we should be installing mining units. The plan was to pay back dividends to our investors by now. We can’t do that because we are blocked by Mr. Woestmann. It’s not clear that he is making any positive contribution to Envion’s business,” said Luckow.
Controversy Over Contradiction in Amounts
Two days after the first accusations about the fraud of the 40 million tokens, Woestmann released a video saying that 20 million tokens were illegally generated, not 40. The press was quick to ask about this apparent contradiction in the number of tokens, to what Woestmann answered:
“There is no contradiction: 41m Tokens have been created without the knowledge and permission of the board. 24m of them are totally illegal because they are not covered by the prospectus. (…) And I general I would say that the German judicial system will bring light into the suspected large-scale fraud.”
In the video statement, he continued telling investors that a new token is being created to cancel the value of the old tokens and pay investors the dividends they are owed when operations begin.
On the other hand, the founders presented a series of complaints against Woestmann, addressing the sudden change in Woestmann's history with respect to the symbolic difference of 20 million tokens in his two statements.
The New York Times spoke with Jessica Smith, 21, who invested $ 28,000 in Envion, almost all the money she earned after two years of cryptocurrency trading. Smith is now desperate looking for a new job, saying that all this has happened with Envion has been very frustrating.