Envion ICO Scandal: Court Guidelines in Cryptocurrency Mining Firm Founders’ Favor
Because our final report on the unfolding circumstance with the deadlocked Envion ICO, a group identifying themselves to CCN as Concerned Envion Investors have been working to generate proof that CEO Mathias Woestmann snatched the company from the founders and falsified documents to seal the deal.
Now they claim to have that proof.
The case is complicated – it centers around Envion AG, the business founded to create cryptocurrency mining units, and also requires Apaton Capital AG, Apaton Finance GmBH, Boerseman GmBH, Quadrat Capital, Sycamore GmBH, Der Finanzinvestor, and Big (Blockchain Intelligence Group).
The public aspect of the case started with Envion CEO claiming that $40 million worth of tokens had been illegally generated:
“In addition to the 86 million tokens issued legitimately in the ICO, yet another 40 million have been generated with no the understanding of the Board of Directors. These were parked on a variety of virtual wallets, some of which have been then additional distributed. After marketing the tokens on social media platforms, a portion of these digital securities was sold by the fraud perpetrators to crypto exchanges.”
Envion CEO Woestmann agreed that fraud had taken location, saying:
&ldquoIt was our ambition to make crypto mining go green. I am all the a lot more disappointed by this fraud, which has stricken not only our company, but also the whole Blockchain globe.&rdquo
A forensic investigation has been carried out Blockchain Intelligence Group (Massive), hired by Envion AG led which is now led by Woestmann. Woestmann has not released the full report, despite the fact that claims it supports his accusations of illegal token generation. Large produced a short blog post explaining that their part is just to analyze and assessment information, not to spot blame at any individual’s doorstep. The supposedly independent auditor went on to say:
“Blockchain Intelligence Group was contracted by Envion AG to conduct a forensic cryptocurrency investigation. This is the full extent of our partnership with Envion.”
Nonetheless, that does not seem to be correct.
Investors, founders, and journalists at FinTelegram allege that businesses headed by Woestmann promoted and partnered with Large throughout and right after an early-stage capital raise – if true, the conflict of interest is such that they must by no means have been hired as auditors.
Woestmann is listed as a director of the Apaton Group, despite the fact that his name has now been removed from the official company site. Apaton announced a partnership with Large in April. Big was promoted in the investment letter Der Finanzinvestor, and www.boersenman.de, a domain allegedly owned by Woestmann, redirects to Der Finanzinvestor, linking him to the firm and demonstrating his role in the establishment of Big via several channels.
It appears that as early as January with the ICO ongoing, a feud had developed between Woestmann and the founders — get in touch with was cut for four months without having investor expertise and with no progress in that time. The founders accused the CEO of squeezing them out – when investors challenged Woestmann to respond he released a video now stating that the founders had illegally produced an extra 20 million tokens, not 40 million.
It emerged that, a month right after the ICO, tokens have been sold on exchanges by the founders regardless of there becoming a token freeze. Citing counterfeit tokens, Woestmann implemented a token swap to return investor funds with the guarantee that holders of original ICO tokens would be refunded, despite the fact that buyers of “illegal” tokens would need to sue the creators of said tokens for their funds back.
The founders claimed that their token sale was carried out to fund Trado GmBH and ultimately Envion itself soon after Woestmann allegedly stopped paying for hardware and staff wages. Founder Laurent Martin spoke to CCN saying:
“There is no such factor as additional tokens. It&rsquos a fictitious construct designed by Woestmann to distract from charges against him. We filed in court in early May possibly. There had by no means been speak of further tokens at that point. He found out about the court case and levied his false fraud charges on May 16th.”
A pseudonymous Medium poster claiming to be an investor alleges that the founders implemented a wise contract function permitting them to acquire and sell tokens throughout the freeze period, that the feature was added following the audit was completed with out informing investors, and that the token dump was not compliant with SEC regulations.
The founders insist that the sale was carried out by way of a third celebration and that their lawyers ensured that they were legally compliant throughout. When asked about no matter whether the wise contract had been altered, Martin was tight-lipped, just saying:
“The prospectus was appropriately executed. The wise contract is a implies to execute the prospectus. Further discussion is irrelevant.”
Investors pointed out innacuracies in the Medium post slamming the founders, responding right now to claims that 12.six million EVN were sold by saying:
The second wallet can be viewed right here.
Meanwhile, the founders claim that Woestmann refused to burn tokens when requested and employed powers granted to him temporarily to aid the ICO approach to take more than the firm by means of a covert capital increase which diluted the founder shares from 81 percent to 31 percent, enabling Woestmann to take control.
Woestmann’s associate Thomas van Aubel and his wife Jutta Freifrau von Falkenhausen now hold a 61.five percent share in Envion AG through their firm Sycamore GmbH, and Woestmann has been referred to by investors as a front man for Van Aubel.
Founder’s spokesman Michael Luckow commented on the case saying:
&ldquoVan Aubel and his wife, Jutta von Falkenhausen, are clearly behind the envion coup. Woestmann is just a henchman, a lackey. Woestmann ultimately admits in his press release precisely what van Aubel attempted to cover up&mdasheven in court&mdashthat van Aubel had the firm hijacked by his friend Matthias Woestmann at the expense of investors who have now lost a lot of income. Woestmann and van Aubel have thereby destroyed a lot of investors&rsquo capital.&rdquo
On Thursday 21 June an injunction filed by Trado GmBH against Sycamore GmBH and Quadrat Capital GmBH was passed with the court ruling the capital boost and resulting share dilution as an illegal breach of contract, citing &ldquocollusion behavior by the two managing directors [Woestmann and van Aubel]&rdquo with intentional injury, a violation of the German Civil Code (§ 826 Bürgerliches Gesetzbuch, BGB).
Speaking to CCN, Woestmann said that factors had been far from more than between him and the founders:
“The ruling was an injunction, i.e. a freeze of the existing status, not a final ruling. Its sole objective is to avoid any alter – because the actual legal proceedings may possibly take numerous years in which the underlying scenario which is topic to a future court ruling might otherwise modify and so that the final ruling would run empty.”
With the founders accused of manipulating the intelligent contract as well as losing manage of the company and the CEO getting located in breach of contract when transferring shares to his associate’s business, it’s hard to say who is in the wrong. Arguably each parties have had a hand in the standoff now facing the project, but sadly it is Envion’s 30,000 investors who have paid the heaviest price.
Martin Laurent stated:
“The founders will continue court actions against Quadrat Capital and Sycamore: Woestmann, Thomas van Aubel, Jutta von Falkenhausen, and Dinnies von der Osten till such time as they make a decision to return shares to the founders.”
Concerned Envion Investor group, for their portion, acknowledged that the founders had made their share of mistakes in allowing the firm and associated funds to be taken more than in the 1st place, while categorically stating that Woestmann has clearly manipulated documents and figures to assistance his version of events.
“All the numbers stack up totally when based on the Old Prospectus. Woestmann won’t release the full [Huge] report so we can’t completely analyse. Investors took barely 30 minutes to pull the press release apart – every little thing was accounted for. We also ran our own analysis as there are open supply tools to do so on the blockchain. The data doesn’t lie.”
They expressed a want to see the matter finalized quickly, but all parties are conscious that there are a lot more battles to be fought just before the $one hundred million mining project can commence operations and start granting investors what they paid for.
“It’s receiving painful now and we just want it was over,” the investor group spokesperson said. “Matthias Woestmann is putting up a powerful front, but behind closed doors, he’s carried out. Thomas van Aubel is much more tough.”
Featured Image from Shutterstock
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Published at Sat, 30 Jun 2018 18:07:53 +0000