Envion Heads to Court as $100m Mining ICO Goes Wrong
Well, it looks like a coders vs corporate dispute has turned ugly. The communication fallout will lead to the first major $100m cryptocurrency mining ICO heading to court in Switzerland.
It seems that the founding coders and the corporate media man they brought in to become CEO, Mathias Woestmann have had a major falling out. The founding board are now suing the CEO, Woestmann, who has enacted a hostile takeover of the company.
The founding team, led by Michael Luckow, partnered with the former newsman under the impression that this connected investor would bring more investors in. Envion claims Woestmann proved a liability to investors and exploited administrative maneuvers to take control of the company.
One problem though… In this new world, everything is documented on the blockchain. So, when this finally goes to court, the truth will be revealed.
The CEO’s Side of the Story
The Envion token is based on a Smart Contract written in the programming language known as Solidity and sits on the Ethereum blockchain. The Smart Contract determines conditions and functionality for the issuance and trading of the token.
Investors were given the option to invest in Evion either by paying by credit card or investing through the cryptocurrencies Bitcoin or Ethereum. Each token had the nominal value of $1.00. Consequently, each investor received the exact number of tokens according to the capital that was provided.
The number of the officially-placed tokens issued in the course of the envion ICO is 86 million. Furthermore, according to the prospectus, around 17 million tokens were granted free of charge to the company and its founders and for the bounty program. However, an internal audit has revealed that more than 40 million tokens have been generated without envion’s Board of Directors’ authorization. Utilizing a cascade of wallet addresses up to 12 million tokens were redistributed. Evidently, the purpose was to impede the investigation concerning the whereabouts of the tokens. Several million tokens have already been resold through various crypto exchanges, profits went to unknown actors. Based on the tokens’ nominal value, the loss amounts to $40 million.
The tokens have now crashed to under $0.15, wiping 85% off the value of the tokens.
The above findings are detailed in the report of an independent Blockchain expert group, which was commissioned by envion AG. This report was verified and confirmed by Canadian security firm “Canadian Blockchain Intelligence Group” (BIG). Woestmann filed a criminal complaint in Berlin and informed the Swiss financial supervisory authority FINMA.
Woestmann says, “I promise all investors that we will resolve this case as quickly as possible. Subscribers to the ICO should be largely protected from loss by a token swap.”
The Founders’ Side of the Story
Mr. Matthias Woestmann was in control of the token burn and it didn’t happen. This can all be solved through a token burn.
Blockchain Enthusiast | Digital Currency Analyst
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