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The bitter epilogue of the Savedroid ICO

Lawyer Axel Hellinger has recently frozen the crypto-credit from the Savedroid ICO, which he keeps as an escrow. For from his point of view, it is becoming increasingly clear that not everything is right with the project. Now he is suing himself – and is looking for ways to compensate Savedroid investors.

Sometimes it is difficult to do the right thing. But if Axel Hellinger would not try, he would have been the wrong man for his job.

Axel Hellinger is a lawyer and tax consultant. Out of personal interest, he started For example, he already helped the Lisk at the ICO and supports the crypto scene as a consultant or escrow (trustee).

The purpose of escrowing with an ICO is to make it more difficult, and ideally prevent an exit scam, Axel said. An escrow thus reduces the risk that arises from the advance of the investors. He is instructed to arrange the release of the crypto field only after the occurrence of a specific condition. During the early days of the ICOs, conditions were relatively easy to understand, for example, when it was promised to develop a blockchain. For example, Lisk has promised to build a JavaScript-based coin infrastructure and has done so by creating the Genesis block. This Genesis block marked an important milestone and provided the ICO supporters with the coins.

In the meantime, the projects have generally become more complex. Decisive is no longer the technical basis, but the structure of an ecosystem for which the token is to be used. This and the fact that many infrastructures (Etherum, Lisk, Waves) can be used to create their own tokens without technical know-how invalidate the milestone in the distribution of project coins. This, of course, makes it harder to know when a project has lived up to its promises to investors.

It could still come despite the delivery of project coins to irregularities to cheating. In such cases, believes a trustee, says Axel Hellinger, not instrumentalize, but should actively participate in the clarification of residual doubts. In the worst case, it goes so far that he has to freeze the coins entrusted to him. Which brings us to the project that currently costs the lawyer quite a lot of nerves.

The – Million Euro ICO

Savedroid is a Frankfurt based FinTech company founded by Tobias Zander and Yassin Hankir 2015. There is an app that aims to save smart by using automatic savings rules – Savedroid calls this the Smooves – so that, for example, with each visit to the gym you automatically transfer 5 euros to the savings account. With the ICO, Savedroid should become the “Smart Contract Crypto Savings App”, which allows anyone to automatically and effortlessly save cryptocurrencies.

The ICO White Paper explained very specifically how the Savedroid ecosystem is evolving and what the project will achieve. Even potential future price scenarios of the SVD token sold for 1 cents apiece occurred; Savedroid uses the slogan “Made in Germany”, presumably because the German investors feel it addressed and this should create international trust.

According to Whitepaper, it should be a so-called utility token. At the ICO start 2017 Savedroid poured tokens in the equivalent for about 20 Million euros; partly, the numbers are not very clear, because sometimes information from . These numbers did not originate from the house Savedroid, but were based on extrapolations of the press. These statements were rejected by Savedroid but, so Axel Hellinger, not

.

Of the funds collected, the lawyer manages the crypto currencies in trust, while the EUR payments were received, inter alia, from the Frickbank. The value of bitcoins and other tokens was then around 4 to 4.5 million euros. On the addresses made public by Axel Hellinger are currently 227 Bitcoin and around 7 260 Ether.

The lawyer thus embarked on a venture that exemplifies why ICOs are now discredited – and how difficult it is to draw the line between too much optimism and fraud.

First doubt

During the year 2017 Axel Hellinger became increasingly skeptical about Savedroid. “It has not developed as described in the white paper. They had not achieved their goals by far. “The app, announced for the fall, moved on and on. Even an ERC 20 – token – actually the small 1 × 1 crypt world – was delayed. “This is really no science, in case of doubt, one hires an external developer. That should not have been a problem after the ICO. “

From the announced listing on the top 5 crypto exchanges has been nothing. The SVD tokens are traded only on HitBTC, Bancor and IDEX. The price plummeted, from the issue price of one cent, the SVD token has now fallen to 0, 012 cents. The trading volume on the stock exchanges is very low – one could say, hardly existent – and comes on some days to little more than a few hundred dollars. According to these values, the token could, you could say, already in the advanced dying process.

Axel Hellinger got more and more the impression that the Savedroid-makers were not really interested in the realization of the project – and that they had made promises in the whitepaper that they already knew at the release, that they were unrealistic were.

In June, the first complaints from investors came to him. It barely went forward at Savedroid. The timelime on the website looks promising at first glance, but is quite sobering: In addition to notes to collect funds, the listing on rather insignificant exchanges and meetups you will hardly find anything of substance. There is now an app. But if you trust users' feedback, this app is full of bugs, crashes and more or less non-functional. In the official telegram chat of savedroid will also reported, the lawyer, repeatedly reported problems in the payment of smooves.

With such serious incidents Axel Hellinger raised concerns about criminal liability: “I do not want to be exploited for an investor delusion. If, as a trustee, I allow this, despite clear evidence unchecked, people rightly ask, what is the Hellinger even there for? “

Old wine in new bottles?

Axel researched more thoroughly. The more he learned, the clearer the signs seemed to him. So Savedroid had recruited in his view with the headquarters in Germany, but until today it did not manage to get a license of BaFin for the crypto app, which is why the app may not be distributed in Germany.

“Savedroid is not a developer garage, but a German fintech company. It should have been clear to the board that the app was under the reservation of BaFin. These are former management consultants from McKinsey and a doctorate in business administration. And they've been running a similar app since

The more Axel learned, the clearer his impression became. In the white paper, Savedroid's savings app was sold as a success, while at the time of the ICO, it had already been so unsuccessful that it could have been flopped. At commission income Savedroid in the year 2018 – thus three years after the establishment – only once 65, .

“There are now signs that the Savedroid AG The idea Fiat app was probably already failed at this time. However, with the ICO old wine should still be sold in new hoses. And with the Advanced Bitcoin Technologies Aktiengesellschaft is currently trying to sell the dead horse a third time. “

Balance Sheet Magic

The company structure behind Savedroid is not very straightforward. Savedroid itself is a public company, but not listed on the stock exchange. Advanced Bitcoin Technologies Aktiengesellschaft – which was founded by the same people – is traded on the Düsseldorf Stock Exchange. The assets of Savedroid were introduced through a stock swap – a so-called coat business – in this AG, whereby the real name is first ignored, but Savedroid went over a “back door listing” on the stock exchange.

In terms of accounting, Savedroid AG, Axel Hellinger says, but with more “surprises” on: The Savedroid tokens were issued as alleged utility tokens. A utility token is basically a coupon for a service to be provided in the future. An ICO is therefore financially neutral: The sale of a token has a yield on the one hand, but at the same time an effort in the form of performance promise on the other result. This is clear at the time of the ICO. Only when the service for the utility token has been provided, the liability is eliminated and there is a gain.

The Savedroid Corporation has, according to the lawyer, the liabilities of founded GmbH in Liechtenstein and promised her for 4.6 million euros. So the Savedroid AG tried, the 20, 2 million euro liabilities to the ICO investors on 4.6 million opposite the Upsetting subsidiaries. The Savedroid AG has achieved an extraordinary profit of 1.6 million euros in the year 2017. “A profit that Savedroid AG can never again achieve through its operating business.” This profit should make Advanced Bitcoin Technologies AG stand out as a successful company and attract stock buyers.

By the way, the price of the ABT AG share has risen from 1, 5, . But there is a thin trading volume, the only tradable trades are, explains Axel, displayed as insider wheels. So it is not clear if the strategy has already paid off. With an issue of just 40 million shares, the company was able to at least capitalize its market capitalization on paper 100 pull millions of euros.

break and complaints

All these backgrounds learned Axel but later this year. He had already become too much in February 2018. Savedroid had not been able to dispel the increasing concerns. Axel's attempt to find an out-of-court, amicable solution also failed. Therefore, he filed a criminal complaint, inter alia, because of fraud in the prosecutor's office.

A short time later, an unnamed investor Savedroid accused. According to the complaint, Savedroid has failed to inform ICO investors of their right of withdrawal, so investors have the right to exchange the tokens at the purchase price.

In parallel – and without knowing the ad – Savedroid has quit the convenient trustee. Axel should transfer the bitcoins and ethers to the new trustee. But he refused: “I can not, because the conditions of the trust agreement are not met. In addition, the new trust agreement is also significantly less favorable for investors. It can not be that a party escapes the fiduciary condition by simply swapping the trustee for a more convenient trustee. “

That this decision would not make his life easier, he was already clear at this time. Savedroid has now taken legal action and sued him to return the tokens over 4.6 million euros.

The tokenization of a class action suit

Axel Hellinger sees it as promising to win the lawsuit. As important as it seems, that the tokens are not paid out, this is still not a definitive solution, because it still does not decide that the tokens can be returned to the investors.

In order to achieve this, Axel founded the Iudica Legacy GmbH. “The big problem with such a project is that there are many investors with a relatively small investment, and many of them are from abroad. For them, the hurdle before a German court to draw, of course, very high. “Therefore, Iudica now bundles the alleged recourse claims similar to a class action: The Iudica GmbH buys the Savedroid tokens for 10 percent of its output value – that's still 3-9 times the current trading value. Investors must also cede the recourse claims.

Investors, as well as third parties, can support the process by purchasing class action tokens. With the monies from the class action tokens, the above The holders of the class action tokens will then participate in the event of a profit from the recourse claims.

Despite the many scams and unfinished projects surrounding ICOs, Axel believes that the tokenization of projects still has a future. “For example, Iudica's easy-to-use class action tokens make it easy for participants to win the Savedroid lawsuit. You do not have to make them a co-partner or have a participation certificate register. Many formal or bureaucratic hurdles are eliminated. At the same time, the transparency for the participants is greater and they can use the tokens to sell their profit share to third parties during the ongoing process. “The new tokenization technique is therefore a win for all parties involved.

Notes from the author: The text is based on a long interview with Axel Hellinger. We have no access to case files, nor the opportunity to review Mr. Hellinger's statements; The purpose of this article is not to give an assessment of Savedroid, but to give an insight into the needs that the business of an Escrow in the context of the ICO boom can entail.