Resolution no. 20929

Suspension, pursuant to article 99, paragraph 1, letter b) of legislative decree no. 58/1998, of the public offering of 'EBC token I' and 'EBC token S' to Italian residents by Forgues Gestion SAS, including via the www.europeancryptobank.io website

LA COMMISSIONE NAZIONALE PER LE SOCIETÀ E LA BORSA
[THE NATIONAL COMMISSION FOR COMPANIES AND THE STOCK EXCHANGE]

HAVING REGARD TO Law no. 216 of June 7, 1974, and subsequent amendments and additions;

HAVING REGARD TO Legislative Decree no. 58 of February 24, 1998 ('Consolidated Law on Finance') and subsequent amendments and additions;

HAVING ESTABLISHED that, as discovered by CONSOB through specific investigations, on the Web the www.europeancryptobank.com website is found that promotes the 'Initial Coin Offering' ('ICO') of 'ECB token I' and 'ECB token S';

HAVBING ESTABLISHED that the said website contains a 'white paper' in Italian language which describes a scheme called 'European Crypto Bank' and the aforesaid ICO;

HAVING ESTABLISHED that the said website and the said white paper both allow to attribute the scheme in question to 'European Crypto Bank', which would be a “joint venture”between several companies;

HAVING CONSIDERED that, actually the scheme in question seems to be only attributable to Forgues Gestion SAS, a member company of the said “joint venture” with registered address in France, since the other joint venture member companies have been deleted from the companies register and/or are no longer members of the 'entrepreneurial project” in question;

HAVING FOUND that the said ICO concerns two types of token, i.e., 'ECB tokens': the first type is that of “ECB tokens I'. They allow investors to receive '6% of the annual ECB [European Crypto Bank] turnover”, and can be converted into “ECB tokens S' to enjoy services provided by European Crypto Bank; the second type is that of 'ECB tokens S', consisting of anonymous tokens that, inter alia, allow investors to receive '5% additional tokens each year' and enjoy tax assistance, financial research and “wealth and asset management” services.

HAVING FOUND that in the above mentioned white paper, available on the aforesaid website, it is stated that European Crypto Bank has set itself the 'target : To become a fully regulated Crypto Bank [...] in Europe, by creating a gateway between crypto currencies owners and all traditional assets (Shares, Bonds, Commodities, Real Estate…)'.

HAVING FOUND that in the said white paper it is stated that a 'pre-ICO' would take place between February 116, 2018, and May 17, 2018, with which 'ECB Tokens I' and 'ECB Tokens S' would be offered at more favourable financial conditions than those for the 'ordinary ICO' (variable discounts of 15/10/5%);

HAVING FOUND that, again in the said white paper, the turnover expected from sales of tokens is between a minimum of 5 million euros and a maximum of 200 million euros, and the price is set at 0.63 euros per token;

HAVING FOUND that both in the website and the white paper generic 'wealth and asset management' services and different types of advisory services are promised to those who invest in the tokens, and the intention is stated to create a platform for the online trading and exchange of the aforesaid tokens against conventional assets and/or cryptocurrencies;

HAVING FOUND that again in the said white paper, “financial leverages” are mentioned, and it is promised that

'ECB will provide up to X6 times the real amount invested';

HAVING FOUND that the website homepage displays a link named 'buy' which redirects registered users in an area where they can purchase tokens;

HAVING REGARD TO the fact that, according to the definition under Art. 1, para. 1, letter t) of Leg. Decree no. 58/1998, an 'public offer of financial products' must be understood to mean 'any communication made to people, in any form and by any means, that presents sufficient information about the conditions of the offer and the financial products offered so as to render an investor capable of deciding to buy or underwrite such financial products, including placement by means of licensed bodies';

HAVING CONSIDERED that the elements constituting the offering to the public can be summed up as follows:

a) the fact that the activity concerns 'financial products', a category that includes - pursuant to Art. 1, para. 1, letter u) of Legislative Decree no. 58/1998 - both the 'standardised' figures of 'financial instruments' and 'any other form of investment of a financial nature';

b) performance of communication activities aimed at having one acquire or subscribe to the financial products and, consequently, including at the very least a description of their main characteristics;

c) the fact that the communication in question is addressed to the Italian public;

HAVING CONSIDERED that the notion of 'investment of a financial nature' implies the coexistence of the following three elements: (i) the investment of capital; (ii) the expectation of a return of a financial nature;

(iii) the assumption of risk directly connected to or related to the investment of capital;

HAVING CONSIDERED that the structure of the transaction in question requires (a) subscribers to use their own capital (b) for obtaining a return equal to “6% of the annual ECB turnover', and '5% additional tokens each year”, against a capital contribution from the investor - with a financial leverage equal to 'up to X6 times the real amount invested” - in which (c) a potential financial risk is inherent;

HAVING ESTABLISHED, therefore, that the aforementioned return would be paid against the use of the investor's capital;

HAVING CONSIDERED, therefore, that the reason of the contract in question is the production of a financial return as consideration for the use of the capital contributed by the beneficiary of the said return, who therefore, gives their money with an expectation of profit;

HAVING CONSIDERED therefore, that, with regard to the existence of the requirement referred to in letter a), i.e., the fact that the content of the offering can be classified as a 'financial product', the investment offered by Forgues Gestion SAS, based on the foregoing, appears to qualify as 'an investment of a financial nature';

HAVING ESTABLISHED, furthermore, that the www.europeancryptobank.io website displays information describing the characteristics of the investment scheme in such a way as to render the investor capable of deciding whether or not to subscribe to it;

HAVING ESTABLISHED that the aforementioned website promotes the scheme using standardised and uniform terms, with no possibility for the individual investor to play any part in defining the contract;

HAVING ESTABLISHED therefore, that the requirement set out in letter b) is met;

HAVING SEEN, furthermore, that the offering under examination would be addressed to the public resident in Italy. In fact, the said website, although not available in Italian, contains references to Italy and a “white paper” written in Italian and fully intelligible;

HAVING ESTABLISHED therefore, that the requirement set out in letter c) is also met, since the offering in question is aimed at the public resident in Italy;

HAVING CONSIDERED therefore, that the activity set up by Forgues Gesition SAS aimed at promoting the tokens described on the aforementioned website, qualifies as a the public offering of financial products as defined above;

HAVING ESTABLISHED that the offer in question, on the basis of current evidence, does not qualify for any of the exemptions - contemplated by the combined provisions of Art. 100 of Legislative Decree no. 58/1998 and Art. 34-ter of CONSOB Regulation no. 11971/1998 - from enforcement of the rules on 'solicitation of public savings';

HAVING REGARD TO Art. 94, para. 1, of Legislative Decree no. 58/1998, pursuant to which 'Anyone intending to make an offer to the public must publish a prospectus in advance. To this end, for offers concerning EU financial instruments for which Italy is the Member State of origin and for offers of financial products other than EU financial instruments, prior notification must be sent to CONSOB including the prospectus intended for publication. The prospectus may not be published until it is approved by CONSOB';

HAVING ESTABLISHED that, in relation to the activity set up by Forgues Gestion SAS, neither prior notification nor the information prospectus intended for publication were sent to CONSOB;

HAVING CONSIDERED, therefore, that there are the grounds for suspecting the promotion of a public offer of financial products in infringement of the relevant laws and regulations;

HAVING ESTABLISHED that the public offering of these financial products is currently still ongoing;

HAVING REGARD TO Art. 99, par. 1, letter b) of Leg. Decree no. 58/1998, according to which CONSOB 'can, by way of a precaution, suspend for a period of up to ninety days any offer of products other than those referred to , in Letter a) [i.e. European financial instruments] if there are grounds for suspecting the infringement of the provisions of this paragraph [that regulates the public offer of financial products] or of the relative implementing regulations';

HAVING CONSIDERED that, given the above-mentioned circumstances, the provision identified above must be urgently adopted;

HEREBY RESOLVES AS FOLLOWS:

To suspend for a 90 days - as a precautionary measure - the offering by Forgues Gestion SAS of investments of a financial nature to the public of Italian residents, also promoted through the www.europeancryptobank.io website.

This Resolution shall be brought to the attention of those whom it concerns and will be published in the CONSOB Bulletin.

This measure may be appealed with the Regional Administrative Court of Lazio within 60 days from the date of service.

May 8, 2019

THE CHAIRMAN
Paolo Savona