Resolution no. 21853

Suspension, pursuant to article 99, paragraph 1, letter b) of Legislative Decree no. 58/1998, of the Initial Coin Offering (ICO) regarding the investment of a financial nature known as "Niwix tokens (NWX)" promoted by the company, Niwix Limited, including through the website www.niwix.org

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 7 June 1974, as subsequently amended and integrated; HAVING REGARD TO Legislative Decree no. 58 of 24 February 1998 (the "Consolidated Law on Finance");

HAVING ESTABLISHED that, as a result of Consob’s supervisory activity, the presence was noted on the web of the website www.niwix.org, written in English, which promotes an Initial Coin Offering (ICO) regarding cryptographic tokens known as "Niwix tokens (NWX)";

HAVING ESTABLISHED that on the website www.niwix.org the aforementioned "NWX" are offered at a unit price of 1 euro and the total amount of the offer is set at 320,000,000 tokens, equal to 320,000,000 euro;

HAVING ESTABLISHED that the website www.niwix.org contains a document, entitled "Lightpaper", which describes the rights incorporated in the so-called "NWX" offered. Specifically, the "NWX" offered are linked to so-called "Niwix certificates", representative certificates of 3.5 metres of nickel wire each, offered at a unit cost of 100 euro. In order to purchase a certificate, the user must already hold 340 tokens and, upon the purchase of a certificate, the user is promised the transfer of 220 tokens. In addition, the"Niwix certificates" act as a guarantee of the investment in the "NWX tokens" as they would constitute a means of claiming the physical delivery of the underlying commodity (nickel wire), whose market price would allegedly be higher than the cost of the certificate. Both the "NWX" tokens and the "Niwix certificates" are issued by the company, Niwix Limited, with registered office in London, which would own the nickel wire represented by the aforementioned certificates. Niwix Limited would use the funds collected as part of the offer of the "NWX" tokens and the "Niwix certificates" to finance the activity carried out, in the field of raw materials, by investee companies, among which are expressly indicated the British companies, Ixellion Aeoronautic Ltd and Element De Terre Rare Ltd, as well as the company, Ultimate Investment House Fzc, with declared registered office in the United Arab Emirates. Niwix Limited would then use part of the profits generated by the activity of the investee companies both to pay profits to the owners of the "NWX" tokens and to repurchase the same tokens on the market at the unit price of 1 euro, in order to preserve their demand and value;

HAVING ESTABLISHED that, in addition to the above described investment opportunity in "Niwix tokens/certificates", there is also the possibility of receiving revenue through the performance of an affiliation activity. Users registered on the website www.niwix.org are, in fact, provided with referral links and invited to recruit new parties to obtain additional profits;

HAVING ESTABLISHED that the website www.niwix.org redirects, by means of a special link, to the Twitter account of "Niwix", available at the address, https://twitter.com/_niwix, where the percentage of return on investment in "Niwix tokens/certificates" is indicated to the maximum extent of 120% of the capital paid in;

HAVING ESTABLISHED that, in relation to the ICO described by "NWX" and the connected "Niwix certificates", the video entitled "Q&A 23 JAN 2021", available at https://www.youtube.com/watch?v=03eoR1uQj0M, has been identified on the YouTube channel;

HAVING ESTABLISHED that, in the aforementioned video "Q&A 23 JAN 2021", Roberto Diomedi, a former Director of Niwix Limited, provides information in Italian with reference, among other things, to the "Niwix" project;

HAVING ESTABLISHED that, in the aforementioned video "Q&A 23 JAN 2021", Diomedi also refers to chats of Italian groups, Italian networks and video tutorials in Italian, through which updates on the ICO of "NWX" would be provided specifically to the Italian public;

HAVING ESTABLISHED that the operation regarding "Niwix tokens/certificates", promoted by the company, Niwix Limited, is presented as an investment opportunity, as it would seem to offer potential customers the possibility of using a sum of money to purchase tokens and certificates in order to receive periodic returns, which would be paid in proportion to the capital paid in by customers. The promised returns would derive from the profits generated by the activities of the investee companies, in the course of the activities allegedly carried out in the raw materials sector;

HAVING REGARD TO the fact that, according to the definition provided under article 1, paragraph 1, letter t) of the Consolidated Law on Finance a "public offering of financial products" must be understood to mean "any communication made to people, in any form and by any means, that presents sufficient information on the offer conditions and the financial products offered so as to render an investor capable of deciding to buy or subscribe the financial products including the placement through licensed parties";

WHEREAS the constituent elements of the public offer relevant for the purposes of the above provision can be summarised as follows:

a) the fact that the activity involves "financial products", a category that includes

- pursuant to article 1, paragraph 1, letter u), of the Consolidated Law on Finance - both the "standard" features of "financial instruments"and "every other form of investment of a financial nature";

b) the existence of communication intended to persuade investors to purchase or underwrite these financial products and, consequently, including at the very least a description of their main characteristics;

c) the fact that the communication in question is directed towards Italian residents;

WHEREAS the notion of an "investment of a financial nature"implies the presence of three elements at the same time: (i) an investment of capital; (ii) a promise/expectation of a return of a financial nature; (iii) the assumption of a risk directly connected and related to the investment of capital;

WHEREAS the structure of the operation in question requires (a) a participant to use their own capital (b) for the purpose of obtaining a predefined return, expressed as a percentage and calculated on the capital contributed by the investor in which (c) a potential financial risk is inherent;

HAVING ESTABLISHED that the aforementioned return would be paid by Niwix Limited against the use of the investor’s capital, and that it would be related exclusively to the amount paid, the user not being asked to undertake any activity other than the mere contribution of capital;

WHEREAS the legal reason for the negotiating proposal may be considered to be the production of a financial return as consideration for the use of capital transferred by the recipients of this return, who, therefore, transfer their own money with the expectation of a profit, namely, the increase in the cash invested;

CONSIDERING, therefore, that, with regard to the existence of the requirement referred to in letter a), namely, that the offering in question can be classified as a "financial product", the investment offered by Niwix Limited based on the foregoing, qualifies as an "investment of a financial nature";

HAVING ESTABLISHED that the initiative in question is promoted in standardised and uniform terms, through a presentation that contains a representation of the features of the investment scheme that is such as to place investors in a position to decide whether or not to participate in the actual initiative, but without the possibility for an individual investor to intervene in drawing up the contractual agreement;

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

HAVING ESTABLISHED that the offer promoted through the website www.niwix.org is ongoing and also addressed to Italian investors, as registration on the site is also possible for users connected from Italy and a video in Italian has been identified online in which Roberto Diomedi, a former Director of Niwix Limited, promotes the offer in question; moreover, in the video, specifically dedicated to the Italian public, reference is made to additional information channels reserved for Italian investors;

HAVING ESTABLISHED that a sales scheme is also promoted through the abovementioned website which offers a user the possibility of earning money by recruiting further participants in the initiative and that this scheme is suitable to also disseminate the offer of financial products among Italian investors;

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

CONSIDERING, therefore, that the activity carried out by Niwix Limited to promote investments of a financial nature has the characteristics of a public offering of financial products as defined above;

HAVING REGARD TO article 94-bis, paragraph 1 of the Consolidated Law on Finance, pursuant to which "Anyone intending to make an offer to the public of financial products other than open-ended units or shares of UCITS must publish a prospectus in advance. To this end, an application must be submitted to Consob for approval, with the draft attached. The prospectus cannot be published until it has been approved by Consob pursuant to article 95, paragraph 1, letter b)";

HAVING ESTABLISHED that, in relation to the activity described, the information prospectus intended for publication has not been sent to Consob;

HAVING ALSO ESTABLISHED that, based on current evidence, the offering in question does not appear to fall into any of the exemptions - contemplated by the combined provisions of articles 100 of the Consolidated Law on Finance and 34-ter of Consob Regulation no. 11971/98 - from enforcement of the rules on "solicitation of public savings";

WHEREAS, therefore, there is a well-founded suspicion of the promotion of a public offering of financial products in breach of the aforesaid legislation and the public offering of the financial products in question is still ongoing;

HAVING REGARD to article 99, paragraph 1, letter b) of the Consolidated Law on Finance, on the basis of which Consob: "may suspend the public offering as a precautionary measure for a maximum of ninety days of products other than those specified under letter a) [i.e., securities] in the event of a well-founded suspicion of a violation of the provisions of this chapter or the related implementation regulations";

WHEREAS, given the existence of the above conditions, there is an urgent need to adopt the measure identified above;

RESOLVES:

As a precautionary measure, to suspend, for a period of 90 days, the offer to the public resident in Italy set up by Niwix Limited including through the website www.niwix.org.

This Resolution shall be brought to the attention of the concerned parties and published in the Consob Bulletin.

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

19 May 2021

THE CHAIRMAN
Paolo Savona