For a company that combined aspects of the crypto mining and renewable energy industries, Envion AG was anything but put together. After a successful ICO that raised $100 million, an investigation by the Swiss Financial Market Supervisory Authority (FINMA) and a sweep of suits and countersuits between founders Michael Luckow and Matthias Woestmann led to a court in Zug, Switzerland, shutting down the firm and ordering its liquidation.
According to German news outlet Handelsblatt, in its decision to shut down the company, the Swiss court cited Envion's complete lack of any auditing function and a nonexistent board of directors after Woestmann resigned as board chairman, among other unnamed reasons.
Out of the Solar-Powered Frying Pan and into the Fire
The idea behind Envion's project was to load up cryptocurrency mining rigs in shipping containers and transport them to wherever power was cheap across the globe. The containers were dubbed mobile mining units and they were to be placed near solar and wind farms or fossil fuel-driven power plants. In return, those farms and plants would sell their over-capacities back to the firm to run their mining units. Envion predicted a 161 percent return on investments per year.
After launching the company in early 2017, Luckow brought on Woestmann to be Envion's CEO in October, giving him a 19 percent stake in the company. By January 2018, the Envion ICO had raised $100 million, but Woestmann had pushed through a capital increase and issued actual shares to investor Thomas van Aubel (a German lawyer), rather than tokens, which diluted Luckow's 81 percent stake to 33 percent.
Woestmann removed Luckow's name from the company's team page on the Envion website, which spurred Luckow and other founding members to launch their own blog, where they reached out to their investors directly through a series of posts and video updates.
By May 2018, Woestmann claimed Luckow and founding members fraudulently created 20 million additional tokens to enrich themselves without the knowledge of the board. Because of this, Woestmann planned to take full control of the company, an action Luckow's blog referred to as the "world's first analogue ICO hacking."
Ultimately, by July 2018, FINMA announced that it had started "enforcement proceedings" against Envion. The regulator explained:
"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 court has advised investors who participated in the ICO to verify their identities and file claims with the bankruptcy office or risk not being considered in the dissolution and bankruptcy proceedings. These claims, according to the report, must be filed within a month of the decision, or the investors may end up forfeiting their investments.