Envion’s Big 5 Failures: an Independent Investor’s Perspective on What Went Wrong?

What could possibly go wrong with aggressively promoting over 160% ROI and collecting supposedly $100 million for a German-Swiss crypto mining ICO? A lot, as Envion investors had to learn the hard way.

Envion generated highest hopes and investors felt assured by an ‘SEC compliant’ ICO issuing security tokens within German-Swiss regulation. Unfortunately, the project went horribly off track and many investors are up in arms.

Therefore, I’m summarizing insights around the question ‘what went wrong?’. Here the list of Envion’s Big 5 Failures (see sources in endnotes):

1) *Incomplete Prospectus* omitted the real picture of Envion’s behind-the-scenes corporate structure including involved key entities (Quadrat GmbH and Trado GmbH), the core business role of Trado (e.g. ICO, IP, token generation etc.), its shadow CEO Michael Luckow and related ‘founders’. Discrepancies exist between prospectus and whitepaper who are shareholders and founders. Why the secrecy about real structure, shareholders and founders?

2) *Corporate Raiding* by CEO Mathias Woestmann and accomplices, abusing an inadequate corporate structure and allegedly trying to secretly sell Envion. Woestmann claims to have justification for his capital increase (which undoubtedly breached a Quadrat-Trado contract) but no hard evidence has been brought forward yet. Why the strange silence? Fraud?

3) *Insider Trading* by undisclosed ‘founders’ using a backdoor created via modifying the previously audited EVN smart contract. Tokens worth millions of US$ sold before end of an earlier in place and communicated 6 months lock period, via an undisclosed 3rd party. Investors were not informed upfront about smart contract manipulation or token sales. Exact amounts, use and whereabouts of resulting funds unknown. Why the secrecy? Fraud?

4) *Misleading Communications* towards investors overselling positive news (‘hardware arriving’, ‘production started’, ‘mining started’, LOIs etc.) and hiding factual ‘negative’ news (Enel and PWC drop off, fallout between CEO & founders, founders’ selling of tokens etc). Critical voices are banned from Telegram channels and critical media reports arrogantly dismissed as ‘irrelevant’. Complicit in fraud?

5) *No Mining, Huge Losses*. To date, instead of hundreds of mining units generating the heavily promoted 161% ROI, investors face up to 85% losses of their investments. Court cases between parties and investor protection lawsuits based on prospectus liability are underway, making it impossible to assess if there ever will be Envion mining payouts. One of the biggest ICO fails so far?

Unless a major breakthrough surprisingly would happen, the conflict could go on for months, even years. Looks like courts will now determine the fate of Envion.

Note: This article has first been published by Franze Monaco and is reproduced here with permission.

Disclaimer:

DYOR. This is an independent investor’s perspective based on information as of 4 July 2018. Given the ongoing PR war between the disputing parties and attempts to influence investors, special caution has been taken to be neutral, diligent and discerning. Beware the trolls and biased information.

Sources / Further Reading:

1)Legal views by experienced investors, experts and lawyers. See also FinTelegram (27 June 2018).

2) see Handelsblatt (16 May 2018 and 26 May 2018) and FinTelegram (25 May 2018).

3) see Medium (20 June 2018), FinTelegram (19 June 2018 and 27 June 2018).

4) see New York Times (31 May 2018) and FinTelegram (27 June 2018).

5) see New York Times (31 May 2018), Handelsblatt (26 May 2018), FinTelegram (9 June 2018 and 27 June 2018).Three things cannot be long hidden: the sun, the moon, and the truth.

“Three things cannot be long hidden: the sun, the moon, and the truth.”

all EnvionWatch articles: https://telegra.ph/The-EnvionWatch-list-of-articles-10-08