The Swiss Financial Market Authority (FINMA) said that an encryption company that accepted about US $ 90.5 million in deposits from more than 37,000 individual investors made it illegal. This company, Envion AG, is currently under liquidation by Zug’s bankruptcy authority.
The result of FINMA’s decision is that IMOs that started raising money for a company can actually be subject to Swiss banking law. This requires that all companies that receive deposits from the public must first obtain a bank license.
Crypto Clampdown; Envion ICO is considered illegal by FINMA
According to a press release from FINMA, the funds raised by Envion AG, a cryptographic company specializing in mining infrastructure, have become so illegal. The Swiss financial watchdog had initiated enforcement procedures against the launch of digital currencies in July 2018, part of which would include investigating suspicious business activity.
Having recently completed the investigation, the regulator said more than 37,000 people had invested money in Envion AG. The investments came through encryption – mainly Bitcoin and Ethereum – as well as US dollars. The total of all illicit investments made in the company’s initial coin offering was approximately $ 90.5 million.
FINMA found that Envion AG was in breach of the Swiss banking law because the investments were considered public deposits. Any entity receiving these deposits in Switzerland must first obtain a bank license.
In addition to not having a bank license, Envion’s issue of the EVN card was disputed. FINMA argues that some aspects of issuing cryptographic brands to investors were inconsistent. Finally, in the list of legal violations made by the company was the fact that the prospectuses had no minimum legal requirements and the internal audit of the company had not been completed.
FINMA to concentrate on ICOs
The tide of the 2017 ICO frenzy looks like it could finally be here for many businesses that are taking advantage of controversial fundraising campaigns that seek to capitalize on the growing popularity of encryption assets. According to a previous commitment, FINMA today announced a press release detailing Envion AG that it will continue to focus on start-ups that have illegally used the cutting-edge financing method to issue banknotes for sale to investors. Finally, it states that this could lead to the liquidation of start-ups, as is the case with Envion AG.
In 2017, billions of dollars were poured into startups through ICOs. It now appears that most were illegal under current regulations.
However, this should not be taken as hostility by the Swiss regulator to all initial currency bids. The regulatory body stated:
“FINMA is committed to ensuring that serious innovators are able to launch ICO projects legally.”
Finally, the financial watchdog drew attention to the guidelines he has previously published for those thinking of starting their own cryptographic brand and raising money through the ICO.