A firm that began as a combination of two of the hottest trends going – ecological investing and cryptocurrencies – quickly became a bitter fight between the two partners and now has been shut down by a court in Switzerland.
As a startup 11 months ago, Envion promised to produce cryptocurrency coins in mobile trailers using renewable energy. One of the criticisms of Bitcoin and other cryptocurrencies is the massive amount of power they consume.
The brainchild of partners Michael Luckow and Matthias Woestmann quickly collected about $100 million through initial coin offerings, or ICOs.
But then things fell apart. Woestmann accused Luckow of manufacturing more coins than agreed on, so he engineered a capital increase that diluted Luckow’s share. A flurry of suits and countersuits followed and operations ground to a halt.
Not what it seems
Investors meanwhile found out that even though Woestmann was the chief executive, the firm itself was registered in Switzerland and the actual work was done by Trado, Luckow’s firm in Berlin.
The cantonal court in Zug wasted little time shutting the firm down and ordering its liquidation. Among other things, it cited the complete lack of any auditing function. Also, since Woestmann resigned as board chairman, there hasn’t been any board at all.
The court ruling is not binding pending appeal, so the last word has not been heard. Woestmann continues to blame Luckow, accusing him of not providing information about the ICOs. Luckow says Woestmann always planned to push the firm into liquidation, but he will fight it and believes the original concept can still work.
Zurich legal expert Urs Schenker, however, thinks the firm is done. Financial supervisors have already appointed an investigator, making liquidation “unavoidable.”
Envion investors who hope to get their money back will need patience and steady nerves. The liquidation could take a year or two and the legal situation is unclear. Are the possessors of the coins creditors of the firm?
Besides that, much of the collected money isn’t in Envion’s accounts, but in those of Luckow’s firm in Berlin.
Felix Holtermann covers blockchain, crypto-currencies and fintech for Handelsblatt. Sönke Iwersen is a member of the investigative team. Darrell Delamaide adapted this article into English for Handelsblatt Global. To contact the authors: [email protected] and [email protected]