Shareholders fight each other, ICO investors lose
We are regularly contacted by investors around the ENVION ICO and confronted with opinions and facts. We do our best to analyze them and provide our opinion. And we are not siding with either party except the ICO investors.
Lastly, we reported on the medium article of an ICO investor who accused the TRADO founders of manipulating the smart contract and selling the EVN Founder tokens during the announced lock-up period. The investor has carefully analyzed the code of the smart contract in great detail and comes to exactly this conclusion. He also believes that the code could only have been manipulated after the smart contract audit, which the ICO has repeatedly emphasized.
We cannot say at this point whether this investor is right about his analysis and/or hypothesis, but his arguments are certainly worth looking into. We also suggest that the ENVION founders around the TRADO team and Michael LUCKOW deal intensively with the questions and arguments of this investors’ analysis, also taking into account the chaos that the two founder groups around Michael LUCKOW and Matthias WOESTMANN have caused.
The Smart Contract only a tool?
In a reply to the investor, Michael LUCKOW purports that the smart contract would not have had this important position within the ICO. The smart contract would only have been a “tool” to perform the ICO. Well, this argument may make an example of the ENVION case for other ICO’s then.
LUCKOW then no longer deals with the detailed accusations of the investor’s analysis. This probably proves Jimmy SONG‘s medium article “The Truth about Smart Contracts“, which was hotly debated in the crypto world just last week, right -the quality of a smart contract depends on the quality of its developer.
The smart contract subject is either not important enough for LUCKOW or the investor is right with his hypothesis of manipulation.
In the case of ENVION, the prospectus, as well as the white paper, explicitly refer to the smart contract and thus it’s part of the legal ICO package on which investors bought EVN tokens. The smart contract could, therefore, be described as a binding supplementary agreement to the main contracts, i.e. prospectus and subscription agreement.
In LUCKOW‘s answer, the investor is informed that his arguments and complaints would only hinder the work of the founders around the TRADO team. Purportedly, they are already busy with taking actions against WOESTMANN and its partner Thomas VAN AUBEL and colleagues. So it is implicitly assumed that WOESTMANN is the generally accepted culprit and TRADO and LUCKOW are the innocent victims and brave fighters for the ICO investors. Furthermore, it is also assumed that the interests of the founders and the ICO investors are the same. This may be questioned. Apparently, all responsibility for the failed US$100 million ICO and the now disappointed ICO investors is being expelled. Let’s call this a “Robin Hood Approach” of the TRADO team for now.
TRADO only wanted to be a supplier?
Furthermore, LUCKOW argues that his TRADO GmbH would only have been a kind of supplier or supporter for ENVION AG. Otherwise, he and TRADO GmbH would not have had too much to do with the ICO. That’s at least how we read LUCKOW‘s answer. Therefore, the ICO and the problems arising from it are a matter for ENVION AG and its board of directors “in the first place“. Interesting turn, isn’t it? The SEC has made it pretty clear in its recent statements and sanctions that the ICO issuer and all supporting people must be honest with investors in all communications. Cases involving celebrities promoting ICO’s such as CentraTech, whose operators have been accused and arrested of making false statements in the course of the ICO, may also be referred to at this point.
The fact is, however, that the TRADO team also has responsibility for the ICO beyond a mere supporter’s role due to the existing communication. The TRADO team must have been aware, for example, that the crypto-mining business was not part of ENVION AG and that the prospectus and white paper were wrong. The TRADO team must have been aware that it was not only a supplier for ENVION AG because they publicly claimed to be part of ENVION AG. For this, they also received the EVN Founder’s tokens and apparently sold some of them during the lock-up period. With the sale, they are said to have collected several million dollars. In his reply to the investor, LUCKOW argues that they earned “only” US$ 2 million by selling founder tokens.
It is interesting to note that Matthias WOESTMANN argues similarly and positions TRADO GmbH as a supplier. In this case, the prospectus and the white paper are wrong then. Such a mission-critical dependence on a partner has not been described. On the contrary, it was explained that ENVION AG holds all assets and know-how. But at least then the two founding teams would have at least one common view. So it seems that “only” the number of shares that the TRADO team wants to have in ENVION AG is at stake. Is this of any interest to the ICO investors? I guess not!
However, the fact that a loan agreement between TRADO Handels GmbH and QUADRAT CAPITAL was concluded with the purpose to found and finance ENVION AG makes TRADO GmbH a de-facto co-founder. TRADO GmbH had the right to convert the loan agreement into shares of ENVION AG. This agreement and the procedure is exactly what is currently under dispute.
It should be noted once again that neither TRADO GmbH nor Michael LUCKOW nor the loan agreement was mentioned in the prospectus or in the white paper.
The TRADO team is not Robin Hood in this drama
In LUCKOW‘s latest argumentation, the TRADO team presents itself as a kind of Robin Hood and an avenger of the disinherited (a.k.a. investors), who has taken up the fight against the evil WOESTMANN in the very best interest of all ICO investors. WOESTMANN is presented as a kind of Sheriff of Nottingham character and perhaps Thomas VAN AUBEL is assigned the role of Prince John in this investor’s drama. Well, maybe they are indeed the evil characters. It seems undisputed that there have been irregularities on the part of WOESTMANN at the shareholder level. However, this does not mean that the TRADO team is automatically innocent and the good actor at the ICO level. It’s not sure there’s a good actor at all in this drama right now. Both parties actually wrote this drama.
Rather, both founders of ENVION AG are of course jointly responsible for the ICO disaster and must answer to the investors – to each and every one of them. From the perspective of investors protection, the TRADO team does no better than the WOESTMANN team around QUADRAT CAPITAL.