The Swiss Financial Market Supervisory Authority (FINMA) has been keeping a close eye on ICOs launched in the country, and it’s finally found one that it can sink its teeth into. FINMA has gone after the Environ AG ICO for failing to comply with traditional market rules when it comes to funding and is seeking to push bankruptcy charges against the project for doing so. Environ AG was based in the Swiss crypto valley of Zug and is now in the midst of its liquidation process. This spells bad news for other projects looking to hold an ICO in the country, as sticking to traditional market rules for funding could be quite difficult for an ICO to achieve.
Collecting Funds Without Proper Documentation
When it comes to fundraising in what is arguably the banking playground for billionaires, the regulators aren’t taking anything lightly. While Swiss regulators have been willing to bend the rules slightly to help the crypto industry grow, it’s not loosening its laws on funding rounds. Environ AG scooped just over $90 million in its ICO that was filled by more than 37,000 investors. The tokens issued resembled an STO and is the reason behind FINMA shutting the party down. The ICO prospectus didn’t meet industry standards and therefore the funding round has been seen as illegal by FINRA.
No Misuse of Funds Found
Industry critics have hit out at the decision to force Environ AG into liquidation due to the fact no misappropriation of funds was found in the investigation. Essentially, all funds collected were being stored safely and used for the purposes outlined in the ICO. Environ AG wasn’t violating any funding use laws by any means, and the charges are simply due to a faulty prospectus.
Big Time Funding Hitting the Crypto World
While Environ AG is sinking to the bottom of the blockchain graveyard, other projects are receiving more funding than ever before by opting for private funding rounds. Tendermint managed to scoop $9 million in a series A funding round led by Bain Capital and 1Confirmation. On the other hand, Waves is seeking a further $120 million in a private funding round to help launch its Vostock platform and get its ecosystem up and running.
The case of Environ AG is actually rather sad, as it highlights the importance of sticking to the rules and regulations in the country the ICO is launching in. Switzerland is pro ICO and STO in many ways, and is by no means looking to kill the party. Environ AG simply broke the rules and must now suffer the consequences.