Resolution no. 22713

Suspension, pursuant to art. 99, paragraph 1, letter b), of Legislative Decree no. 58/1998, of the public offering of financial products concerning "Investment Plans" named "Starter", "Professional", "Business" and "Enterprise" promoted by Luxem Capital, Inc.through the website https://luxemcapital.com

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 and subsequent amendments and supplements;

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

HAVING ESTABLISHED that, as a result of Consob’s supervisory activity, the website https://luxemcapital.com was found on the Internet, which was found to be active and the contents of which were also available in Italian;

HAVING ESTABLISHED that the website https://luxemcapital.com promotes four "investment plans" named "Starter", "Professional", "Business" and "Enterprise";

HAVING ESTABLISHED that, based on the information published on the website https://luxemcapital.com, the "investment plans" promoted through the same website https://luxemcapital.com reportedly vary in terms of the minimum and maximum deposit allowed as well as the percentage of "earnings" they ensure investors and the timing of the "main return", as follows:

- "Starter": "ROI 5 %", "Minimum: $100", "Maximum: $499", "Duration: 24 hours";

- "Professional": "ROI 5 %", "Minimum: $1,000", "Maximum: $ 4,999", "Duration: 3 days";

- "Business": "ROI 5 %", "Minimum: $5,000", "Maximum: $9,999", "Duration: 7 days";

- "Enterprise": "ROI 5 %", "Minimum: $10,000", "49,999", "24 hours"; "Duration: 30 days".

HAVING ESTABLISHED that the website https://luxemcapital.com states that "Luxem Capital is a digital currency investment platform [...] built for long-term and short-term investing;

HAVING ESTABLISHED that, after registering with the website https://luxemcapital.com through a procedure freely available also to Italian users, it is possible to access the personal area which contains features dedicated to purchasing such "Investment Plans";

NOTING that Luxem Capital, Inc. with declared seat in Luxembourg, mentioned in the website https://luxemcapital.com, has not replied to the requests for information made by Consob and sent to the address found on the website https://luxemcapital.com as well as forwarded to the e-mail address "support@luxemcapital.com" provided on the same site;

HAVING ESTABLISHED that the above transaction is presented as an investment opportunity;

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 as to render an investor capable of deciding to buy or subscribe the financial products including the placement through licensed parties";

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

a) the fact that the activity involves a specific or several specific "financial products", a category that includes – pursuant to art. 1, para. 1, letter u), of the Consolidated Law on Finance – both the typified characteristics of "financial instruments" and "every other form of investment of a financial nature";

b) the existence of a communication intended to persuade investors to purchase or subscribe to these financial products and a description in uniform and standardised terms of the main details thereof;

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

HAVING ESTABLISHED that the scope of the contract proposal conveyed through the website https://luxemcapital.com is deemed to have the characteristics to categorise such "investment plans" as financial products, in their capacity as a "form of investment of a financial nature";

WHEREAS this specific case, according to Consob's consolidated approach, is deemed to possess elements that qualify the notion of an "investment of a financial nature", given the ascertained coexistence: (i) of an investment of capital; (ii) of a promise/expectation of return of a financial nature; (iii) of the assumption of a risk connected to the investment of capital;

WHEREAS the structure of the transaction in question entails that a) the purchaser uses their capital for the subscription of one or more "Investment Plans" among those indicated on the website https://luxemcapital.com; b) by virtue of such subscription, investors are offered a variable return in relation to the "Investment Plan" subscribed by each user without the same users being required to conduct any further activity; c) with consequent assumption of a risk related to the use of the invested capital;

HAVING ESTABLISHED, therefore, that the aforementioned return is reportedly paid in exchange for the use of the investor’s capital;

WHEREAS, consequently, the legal reason for the contracts offered via the website https://luxemcapital.com can be deemed to be the generation of a financial return as consideration for the use of capital paid-in by the recipient of such return, (who, therefore, contributes their own money with an expectation of profit, namely, an increase in the cash invested, "investment purpose");

CONSIDERING, therefore, that, with regard to the existence of the requirement referred to under letter a), namely, that the offer in question may be classified as a "financial product", the investment offered, including through the website https://luxemcapital.com, based on the above, appears to qualify as an "investment of a financial nature";

HAVING ESTABLISHED that the above informative content on the site https://luxemcapital.com provides a consistent representation of the features of the investment proposals, such as to place retail investors in a position to assess whether or not to subscribe the initiative;

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

HAVING ESTABLISHED, moreover, that there are elements deemed to suggest that the offer in question is also aimed at the Italian residents, since the contents of the website https://luxemcapital.com were available in Italian and, as part of the checks carried out on said website, no mechanisms were found aimed at limiting or excluding registration to the same domain by users connected to the web from Italy/through Italian IP addresses;

HAVING ESTABLISHED that, with regard to the initiative in question, a complaint was also received from an Italian investor who sent a copy of the conversations, in Italian, with an operator of the website https://luxemcapital.com and who claimed to have suffered financial losses in connection with the initiatives promoted on the website https://luxemcapital.com;

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 ESTABLISHED, therefore, that the activity carried out by Luxem Capital, Inc. has the characteristics of a public offering of financial products, as defined above;

HAVING REGARD TO article 94-bis of the Consolidated Law on Finance, paragraph 1, which establishes that "parties who intend to make an offer to the public of financial products other than securities and shares or units of open 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 described activity, the prospectus intended for publication has not been sent to Consob;

HAVING ESTABLISHED furthermore the non-existence of any of the exemptions – provided by the combined provisions of article 100 of the Consolidated Law on Finance and article 34-ter of Consob Regulation no. 11971/1999 ("Issuers’ Regulation") – from enforcement of the rules on solicitation of public savings set forth by articles 93 bis et seq. of the Consolidated Law on Finance;

WHEREAS, therefore, there is a well-founded suspicion of the promotion of an offer to the public of financial products in breach of the relevant laws and regulations and the offer to the public of the financial products in question is still ongoing;

HAVING REGARD to article 99, paragraph 1, letter b) of the TUF, according to which Consob: "may suspend as a precautionary measure, for a period not exceeding ninety days, the offer concerning financial products other than those referred to in letter a) [i.e. securities], in the event of a well-founded suspicion of violation of the provisions of this chapter or of the related implementing rules";

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

RESOLVES:

To suspend, as a precautionary measure, for a period of 90 days, the offering to Italian residents concerning "Investment Plans" named "Starter", "Professional", "Business" and "Enterprise" promoted by Luxem Capital, Inc. through the website https://luxemcapital.com.

This Resolution shall be brought to the attention of the all 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.

24 May 2023

THE CHAIRMAN
Paolo Savona