The initial coin offering industry is plagued by scams, shady projects, and a lot of miscommunication. In the case of the Envion ICO, the founders are suing Matthias Woestmann and his corporation for breaching contractual obligations. This legal action against the shareholders of Envion AG, registered in Switzerland, doesn’t bode all that well for this particular project.
WHAT IS GOING ON WITH ENVION?
As we have seen with the Tezos ICO, a discrepancy between initial promises and the end result often leads to legal action. While the Tezos team was capable of resolving such concerns amicably after a few tough months, it remains to be seen if the Envion ICO will have a similar outcome. So far, it isn’t looking all that promising, especially with the legal action being taken as of right now.
To put all of this into perspective, the Envion ICO successfully raised $100 million from investors all over the world. Although the project has a lot of merit, it seems the project’s founding team isn’t too happy with the shareholders of Envion AG. Quadrat Capital GmbH, a company managed by Matthias Woestmann, is of particular interest. It appears Woestmann has unlawfully secured the majority stake in Envion AG by breaching contractual obligations.
Envion AG is a blockchain startup which produces cryptocurrency mining units powered by renewable energy. It is a very promising venture, as the electricity waste associated with cryptocurrency mining has been a controversial topic for some time now. With the ICO having completed successfully, the plan was to create mobile blockchain data centers. Said units would have been installed at power plants to take care of the renewable energy aspect. Unfortunately, those plans have been put on hold due to the legal action being taken.
The original plan involved Matthias Woestmann being a liaison between the project and investors and advisors from his network of contacts. That never materialized, as Woestmann allegedly turned out to be more of a liability than anything else. He even wrested control of Envion AG in the process, without ever attempting to make good on the original business plan. It’s a very troublesome development if true, and one which triggered the legal action being taken.
After a fair few developments, the current situation shapes up as follows. The original founders only have a 33% ownership of Envion AG, whereas Woestmann is in control of the other shares. He also did not restore ownership to the founders as previously agreed upon, but rather issued the shares to a company controlled by his alleged codefendant. All of this makes Envion look rather suspicious, and it shows how one individual can tarnish the reputation of an entire company in fairly short order.
The bigger question is where things will go from here. Despite successfully raising $100 million, it seems the Envion project will not move ahead until all of these issues are resolved. It is impossible to tell how long that process will take exactly, although legal action usually takes anywhere from a few months to years. In any case, situations like these need to be taken with a grain of salt, as there are always two sides to a story.