FINMA Declares Envion AG’s $91 Million Crypto Mining Initial Coin Offering (ICO) Illegal
FINMA Declares $90 million ICO illegal
By now, it is apparent that traditional financial regulators hold a lot of power over the crypto industry, particularly when it comes to passing regulations that are compatible with the growing market.
A recent example of this is the decision by FINMA, the Swiss financial regulator, to declare the $90 million raised through an ICO as illegal money.
The firm that raised the money is the Swiss firm Envion AG, who raised funds from over 37,000 investors in Exchange for crypto tokens. Now, FINMA is claiming that the Token was unregistered and thus, illegal.
Not Playing By The Rules
Among the accusations made against Envion AG are that their prospectuses did not meet the minimum requirements set by FINMA and that they also did not have an internal audit arm, which is one of the most important requirements.
The company is, however, stating that they are being unfairly accused and that there was no intention to dupe investors. They also claim that the investigation conducted by FINMA yielded no evidence of misappropriation of funds.
“There was no misappropriation of assets,” said Envion’s former chief executive Matthias Woestmann.
The case is still ongoing and while no decision has been made by FINMA, this does revisit the topic of the treatment of ICOs by world governments.
ICOs Around The World
Even though blockchain and Cryptocurrency have seen much more acceptance in the last few years, the legal status of various aspects of the industry is still uncertain.
Smart contracts, for example, are subject to debate about whether they are legally binding or not, with lawsuits even being filed with claims of breaches of contract.
In places like China, Cryptocurrency isn’t even recognized as a medium of Exchange, though people still find ways to skirt around this law by using foreign IPOs and registering their firms with foreign addresses.
Then there is the matter of ICOs. While they aren’t quite as popular as they were a year ago, they are still a means by which companies can raise funds. They have particularly been useful for smaller companies who wouldn’t have been able to get listed for an IPO.
There is, however, suspicion surrounding ICOs with the Securities and Exchange Commission in the United States shutting down several of them In 2018. In South Korea, ICOs are banned altogether for fear that they will be used for illegal activities or as a means to dupe investors.
Hopefully, this particular case gets resolved and acts as a starting point towards more favorable ICO laws.