News reports that Liechtenstein-based investment platform Neufund had received FMA approval were wrong. The company does not carry out any activities that require FMA approval in the first place.
On 16th September, various blockchain outlets have announced Liechtenstein-based Firth Force GmbH had received approval by the Financial Market Authority Liechtenstein (FMA) for its investment platform Neufund. According to the news reports, the FMA had approved Neufund to carry out public offerings with a minimum investment of CHF 10.
Last week, on 27th September, the FMA had clarified via a public announcement on its website, that such news reports were wrong. The FMA has not granted any approval and Fifth Force GmbH does not have a license from the FMA.
Essentially, that means Fifth Force is not subject to supervision by the FMA. Without such approval, Fifth Force and its Neufund Platform is not authorized to provide financial services that are subject to licensing according to Liechtenstein law.
Neufund does not need an FMA license
To clarify: There is nothing wrong with not having FMA approval. It just means Neufund cannot carry out certain activities. The FMA also states on its website that it has no knowledge that the Fifth Force GmbH “carries out activities requiring a license.” So it’s all above board. While the FMA has not granted a license or given any approval, they have supposedly informed the company that it does not fall under the FMA’s purview.
Fifth Force GmbH is registered in both Liechtenstein and Germany. The company has already initiated talks about licensing requirements with the German financial markets watchdog Bafin about two years ago.
To avoid the need for a Bafin license, Neufund is structured in a waz that company stakes marketed via the platform are held by a single-purpose firm called Neumini which will issue tokens that in turn guarantee the rights linked to corporate stakes, such as dividend payments.
This way, Neufund does not directly issue securities, which means it doesn’t need a license to sell capital investments and is therefore not subject to the financial market authority’s supervision.
Liechtenstein instead of Malta
When discussions with Germany’s Bafin were ongoing, Neufund CEO Zoe Adamovicz has warned that it can take its business elsewhere. “If it doesn’t work out, we’ll go to Malta,” Ms. Adamovicz said.
It seems Malta has lost the competition as Neufund launched in Liechtenstein. The reason for this decision was likely the country’s welcoming policies towards blockchain businesses.
Adrian Hasler, Prime Minister of Liechtenstein, stated, “I am pleased that Neufund has decided on Liechtenstein. This shows that Liechtenstein, with its open attitude towards new technologies, is perceived as an attractive location for innovative business models.”
The first offerings are already live on the platform, one of them being mobility firm Greyp, a company backed by German sports car giant Porsche. According to a press release quoted by Cointelegraph, Camel Group and T-mobile are also planning on using the platform. Neufund has processed 16 million euros ($17.7 million) to date since its launch in 2016.