Investors should not be deceived by the relative calm surrounding the ENVION case. This German-Swiss ICO is far from over for authorities, courts, and lawyers. On the contrary, it may the the calm before the storm! FinTelegram has had extensive discussions with a number of investors and lawyers involved. The Causa ENVION employs several courts in Berlin and already fills 6 volumes at the public prosecutor’s office. We are only at the beginning of this precedent case for the crypto scene. On the basis of the information available to us, we will, therefore, report again on an ongoing basis.
The decisive question here is the legal position of the ICO investors and their claims against ENVION and the persons involved. Will they be able to recover their investments from a collapsed ICO venture?
|DISCLAIMER: Neither FinTelegram nor its employees and editorial staff are personally or economically directly or indirectly connected to ENVION or its players. There are no relationships beyond a journalistic and investigative interest.|
The key actors in this ICO drama are Michael LUCKOW and his head of communication Martin LAURENT on the one side and Matthias WOESTMANN with his lawyers and partners Thomas VAN AUBEL and Jutta von FALKENHAUSEN on the other. WOESTMANN, in his function as CEO of the Swiss ENVION AG, has filed a complaint against LUCKOW et al with the public prosecutor’s office in Berlin for breach of trust and fraud and, according to the legal representatives involved, the authorities are indeed investigating intensively.
In the meantime, LUCKOW has also filed a counter-complaint against WOESTMANN with the prosecutors in Berlin. This situation of mutual complaints and lawsuits can only be of advantage to ENVION’s ICO investors. This at least makes possibles that additional information will be provided for investor lawsuits.
In the coming days, weeks and months we will describe the individual positions of the actors and the roles and responsibilities assigned to them as a kind of process rapporteur. Today we start with the ENVION mastermind Michael LUCKOW.
The invisible responsibility
The Berlin entrepreneur Michael LUCKOW and his TRADO GmbH have been operating as a sort of invisible hands until the outbreak of disputes between the two ENVION shareholder groups. No traces of their work can be found in the ENVION public papers. Neither in the ICO white paper nor prospectus for the issuance of the EVN tokens nor in their social media channels.
From the pleadings and minutes of previous court cases, it can be established beyond doubt that Michael LUCKOW was indeed the mastermind behind the ENVION project. He also makes this clear in his personal statements. WOESTMANN was appointed by him or his TRADO GmbH as frontman for marketing purposes to make contacts into the energy industry and drive investors to the ENVION ICO. According to LUCKOW’s various statements, however, WOESTMANN did not fulfill these expectations.
Here is an excerpt from an affidavit by Michael LUCKOW on the positioning of Matthias WOESTMANN. He produced this affidavit in the course of the preliminary injunction proceedings before the court in Berlin (file number: 91 O 37/18):
|“In my opinion, Mr. Woestmann’s aim of participating – establishing contacts in the energy sector and winning investors and cooperation partners – has not been achieved. He was also unable to achieve any other relevant added value for the project due to his lack of specialist knowledge.
Mr Woestmann did not carry out any significant operational activities in the subsequent period. (…) His contributions were to be understood more as a kind of general feedback.
The implementation of the project requires a complex software architecture, the design of which we spent months working on. It is not obvious that Envion would have been able to comply with this, because the corresponding structures were not created.
Furthermore, the founder of ENVION was recorded on the Telegram channel (contribution now deleted but on file):
|“Nobody gave ever control of envion to Woestmann. It simply meant, he held the shares temporarily. Decisions were still made by Michael Luckow.”|
Furthermore, LUCKOW confirmed in these court proceedings that he and TRADO GmbH (not ENVION or WOESTMANN) hired the Berlin law firm DWF with the set-up of the ICO structure.
In our opinion, there seems to be no dispute that LUCKOW was responsible for the conception of the ENVION model as well as for the legal set up and for the content of the white paper and prospectus.
Why neither TRADO GmbH nor Michael LUCKOW is mentioned in the ICO white paper, the token sale documents and the prospectus for the EVN token issuance remains to be explained. After studying the court files and lawsuits and the statements contained therein, it may not have been negligence, but only intent. It would also be advisable to ask the Berlin law firm DWF, which we believe may have a conflict of interest as it represented both TRADO and ENVION AG in the course of the ICO.
The accusations against TRADO and LUCKOW
The allegations made by investors and their legal representatives against mastermind Michael LUCKOW and his TRADO GmbH under the civil and criminal law can be summarized as follows (read our articles on ENVION and here a status of the lawsuits as of August 2018 on Juve.de):
- deliberate misinformation of ICO investors in public communications;
- seizure of crypto funds paid in by ICO investors on the wallets of TRADO GmbH under the control of Michael LUCKOW;
- manipulation of the Smart Contract with the purpose of selling the own EVN tokens within the blocking period promised to the ICO investors;
- generation of undisclosed 12.6 million EVN storage tokens
LUCKOW and its TRADO GmbH are accused of having misappropriated between 10 and 17 million dollars in investor funds and of having enriched themselves at the expense of ICO investors by selling their own EVN tokens on the secondary market contrary to the lock-up agreement. The calculation of the amount in question is complicated by the fact that not all cryptocurrencies received in the course of the ICO were immediately exchanged for FIAT and/or exchanged on different dates. ENVION AG has filed a suit with the Berlin Regional Court against TRADO GmbH and LUCKOW for the issue of EUR 5,299,140.38. The action is pending.
Essentially, Michael LUCKOW has already confirmed the substance of the allegations in numerous statements, whereby he tries to legitimize his actions by corresponding declarations. Thus he refers to the services rendered by him and TRADO, which would entitle him and/or TRADO to withhold millions from the ICO. Legal representatives of investors doubt whether this position can be held legally.
LUCKOW admitted before the court in Berlin (file number: 91 O 37/18) that ICO proceeds of the equivalent of EUR 10 million went to his private wallet. In an interview with the German newspaper Handelsblatt in May 2018, LUCKOW explains the fact that the proceeds from the ICO were under the control of the “invisible” – Michael LUCKOW and his TRADO GmbH – as follows:
|From February on it became apparent that Envion’s management “does not support to the necessary extent the measures proposed by Trado GmbH for the operative business. This concerns, for example, hardware procurement,” Luckow explains. Trado must, therefore “maintain financial funds for common goals, independent of the current management of Envion AG”, says Luckow.|
LUCKOW already admitted the sale of EVN tokens during the lock-up period but justified this with the need to maintain operations in the very best interest of the ICO investors, of course.
To be continued with Part 2: Alleged misconduct by Matthias WOESTMANN and QUADRAT CAPITAL.