Law
Following a court ruling in Lüneburg, the crypto startup Invao must pay back an investor the invested capital plus interest – a precedent that could lead to further lawsuits.
21.08.2024 – 17:00
The Lüneburg Regional Court has ordered the Invao founders to repay invested funds because they acted without the required Bafin authorization.
In a groundbreaking ruling by the Lüneburg Regional Court, Invao, a startup once considered a pioneer in crypto-based investments, now faces legal and financial challenges.
The court has decided that the founders Frank Gessner and Frank Wagner must pay back the full amount of the investment to an injured investor. The reason for the ruling is the distribution of investment products without the required Bafin license.
While the Invao founders claim the existence of AI for trading, investors and former employees deny this statement, leading to legal complications.
Legal defeat with far-reaching consequences
The case, which initially only concerns a single investor, could open the door to further lawsuits. The court found that Invao lacked the necessary permission to offer its products in Germany.
This precedent underscores the strict regulatory landscape in Germany and could encourage other investors to make similar claims.
The promise of AI and its implementation
A central point of the dispute was the question of whether Invao actually managed crypto assets using artificial intelligence, as claimed. While the founders insist that such AI existed, the plaintiffs doubt this and rely on statements from former employees.
The court could not conclusively clarify this question, but found that appropriate trading software had been developed and used.
Investors react to uncertain outlook
The future looks uncertain for Invao and its investors. Despite the planned appeal against the ruling and the hope for a favorable decision in a higher court, many investors are worried.
The bankruptcy of the crypto exchange FTX, which also hit Invao financially, further exacerbated the situation. The company is trying to reclaim funds held by FTX, but the outlook is bleak. The settlement costs have already consumed a large part of the available funds.
Long-term impact on the crypto market
This case highlights the risks and the need for regulatory clarity in the rapidly growing crypto sector.
As technology advances, regulatory compliance often lags behind, creating both opportunities and significant risks for investors.
Outlook and strategic considerations
Investors and industry observers will be closely monitoring developments to see how the regulatory framework and market conditions evolve.
The Invao case could be a turning point for the regulation of crypto investments in Germany and possibly in the EU. Investors should be particularly cautious in this dynamic and sometimes uncertain landscape and educate themselves in detail about the legal conditions and risks.
