Swiss financial authority are investigating a German-Swiss digital currency venture Envion which started an in flight leading to fraud reports after raising 100 million dollars from an Initial Coin Offering. The Financial markets supervisory authority of Switzerland stated on 26th July that it has opened an enforcement process against Envion because the startup was suspected to have broken banking laws by accepting unauthorized public funds.
According to the report from the Swiss financial authority :
“Investigations carried out by this authority show that Envion accepted money amount to 100 million dollars from more than 30,000 investors who were promised EVN tokens in return.”
In May this year, a misunderstanding broke out between the founders of the company and its CEO with both sides accusing each other of having a foul play. The CEO who is a former journalist of the German television said that more tokens had been issued without proper authorization and were sold to ear illicit profits.
In response, the founders of the company accused the CEO of illegally wanting to control the company other than taking instructions from the founders. Complaints from both parties were lodged with FINMA and others with the German authorities something which left investors wondering whether they would get either tokens or their money back.
Envion started in Berlin in October and set up its office in a Swiss town called Baar because of the favorable regulatory rules in Switzerland. The company had a vision of making environment-friendly crypto mining units. However, after the ICO started the management and founders of the company started the in fights.
FINMA does not tolerate malpractice in the ICO and cryptocurrency industries. In 2017 the regulatory body closed three companies which were operating illegal digital currencies saying that it was still investigating more suspected cases. The body went ahead to issue guidelines to regulate the ICO markets.
Switzerland has attracted many ICOs and in 2017 it was reported that the country attracted 1.46 billion dollars in ICO in 2017 amount which raised by 456 million dollars between January and May on 2018.
A report carried out in May this year indicated that most ICOs tend to fail immediately after conclusion. The report added that only 14 percent of all ICOs become successful adding that only 4% of them end up doing their intended purpose. The problem surrounding ICOs have led to massive regulation of the market with some governments opting to bad the ICO market.