Swiss Financial Market Supervisory Authority FINMA has launched enforcement proceedings against envion AG. The financial regulator claims to have has evidence that the company has breached financial market law in relation to an ICO.
FINMA launched enforcement proceedings against envion AG in July 2018. The proceedings 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 from more than 30,000 investors in return for issuing EVN tokens in a bond-like form. FINMA has said it will make no further comment on the proceedings until they are concluded.
Focus on ICOs
FINMA says it is committed to ensuring that serious innovators can launch their ICO projects lawfully and published guidelines to this effect in February 2018. However, it has also consistently taken action against ICO business models which violate or circumvent supervisory law.
FINMA has also repeatedly drawn attention to the risks that ICOs pose for investors. Warning that tokens acquired in the context of an ICO are likely to be subject to high price volatility.
“Since many ICO projects are at an early stage of development, they are subject to numerous uncertainties. Furthermore, it is uncertain under current civil law whether contracts executed via blockchain technology are legally binding,” stated a FINMA press release in February this year.
In February, FINMA CEO Mark Branson commented that “The application of blockchain technology has innovative potential within and far beyond the financial markets. However, blockchain-based projects conducted analogously to regulated activities cannot simply circumvent the tried and tested regulatory framework.
“Our balanced approach to handling ICO projects and enquiries allows legitimate innovators to navigate the regulatory landscape and so launch their projects in a way consistent with our laws protecting investors and the integrity of the financial system.”