The Swiss Financial Market Supervisory Authority (FINMA) has launched a probe into crypto startup Envion AG for a suspected breach of financial market laws after conducting a $100 million initial coin offering (ICO) in January.
In a press release issued on Thursday, FINMA confirmed that it has initiated investigation proceedings against Envion, for “possible breaches of banking law resulting from the potentially unauthorised 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,” the release noted.
The regulator added that it would be making no further comments until the investigation is formally concluded and clarified that while it was committed to helping companies launch their ICO projects, it would not hesitate to take action against ICOs that do not adhere to set guidelines and violate supervisory law.
Despite their popularity, ICOs have earned a bad reputation owing to the multiple frauds and hacks that have occurred in the space. A recent survey revealed that nearly 80% of the ICOs organized last year were nothing more than scams. Regulatory authorities worldwide have released multiple ICO-related advisories for investors, with the US Securities Exchange Commission (SEC) having sent out multiple subpoenas. ICOs are banned in certain countries such as China and South Korea.
Meanwhile, Envion – a Swiss-run project aiming for the disruption and democratization of the crypto mining industry – is no stranger to controversy. Earlier this year, the company found itself in the midst of a meltdown, as the founders turned on each other with accusations of fraud, leaving investors high and dry and the project hanging in limbo.
Switzerland has earned a reputation as an exceptionally crypto-friendly country, with the canton of Zug having been dubbed ‘Crypto Valley’, owing to the significant presence of crypto and blockchain related startups in the area. However, more recently, Swiss authorities were forced to step in after crypto companies appeared set to shift offshore owing to banking obstacles in the country. Regulators such as FINMA have been working with the Swiss National Bank (SNB) and Swiss Bankers Association (SBA) to help find solutions to the problem.
This article appeared first on Cryptovest
