Resolution no. 22795

Prohibition, pursuant to Article 99, paragraph 1, lett. c), of Legislative Decree no. 58/1998, of the offer to the public 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, as subsequently amended and supplemented;

HAVING REGARD to Legislative Decree no. 58 of 24 February 1998 (“Consolidated Law on Finance”), as subsequently amended and supplemented;

HAVING ESTABLISHED that Consob’s supervisory activity ascertained the presence of the website https://luxemcapital.com, the contents of which were also available in Italian;

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

HAVING ESTABLISHED that according to the information found on the website https://luxemcapital.com, such “investment plans” differed in terms of the minimum and maximum deposit allowed, the percentage of “profit” promised to subscribers, and the timing with which returns would be paid, as set out below:

• "Starter": "Roi 5 %", "Minimum: $100", "Maximum: $499", "Duration: 24 hours";
• "Professional": "Roi 3.5 %", "Minimum: $ 1000", "Maximum: $ 4,999", "Duration: 3 days";
• "Business": "Roi 5.5 %", "Minimum: $5,000", "Maximum: $9,999", "Duration: 7 days";
• "Enterprise": "Roi 10 %", "Minimum: $10,000", "49,999", "24 hours"; "Duration: 30 days".

HAVING ESTABLISHED that the website https://luxemcapital.com stated that "Luxem Capital is a digital currency investment plaform [...] 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 was possible to access the personal area which contained features for purchasing the “investment plans";

HAVING ESTABLISHED that Luxem Capital, Inc. with declared registered office in Luxembourg, mentioned in the website, has not replied to the requests for information made by Consob and sent to the address found on the website as well as forwarded to the e-mail address “support@luxemcapital.com" indicated on the same site;

HAVING ESTABLISHED that the transaction was presented as an investment opportunity;

HAVING REGARD TO the fact that, according to the definition under Art. 1, para. 1, letter t) of Consolidated Law on Finance a "public offering [of financial products]" must be understood to mean "any invitation to offer or promotional message, in whatsoever form addressed to the public, whose objective is the sale or subscription of financial products including the allocation through authorised people”;

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 Article 1, paragraph 1, letter u), of the Consolidated Law on Finance, both the typified features 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 subject of the contract proposal conveyed through the website https://luxemcapital.com, represented by the described "investment plans", has such characteristics that it can be categorised as a financial product, i.e. "form of investment of a financial nature";

WHEREAS, in this specific case, according to Consob's consolidated guidelines, the offer contains all the elements in order to qualify it as an “investment of a financial nature”, given the ascertained coexistence of: (i) an investment of capital; (ii) a promise/expectation of return of a financial nature; (iii) the assumption of a risk connected to the investment of capital;

CONSIDERING that the structure of the transaction in question set forth that a) the interested party would use their capital to subscribe to one or more "Investment plans" among those indicated on the website https://luxemcapital.com; b) by virtue of the aforesaid subscription, investors were offered a variable return in relation to the purchased "Investment plan" without the users themselves being required to carry out any further activity; c) with the consequent assumption of a risk associated with the use of the capital entrusted;

HAVING ESTABLISHED, therefore, that the aforementioned return was reportedly to be paid against 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 production 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, with an “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 contract proposals offered, including through the website https://luxemcapital.com appear to qualify as an “investment of a financial nature”;

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

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

HAVING ESTABLISHED, moreover, that there are unequivocal elements that suggest that the offer under examination was also aimed at the public resident in Italy, 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 was found;

HAVING ESTABLISHED that, with regard to the initiative in question, a complaint was also received from an Italian investor who communicated a copy of the conversations (in Italian) with an operator of the website https://luxemcapital.com; this complainant moreover 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 offer in question is aimed at the public resident in Italy;

HAVING ESTABLISHED, therefore, that the activity carried out by the company “Luxem Capital” has the features of an offer of financial products to the public, 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 likewise ESTABLISHED 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;

HAVING REGARD to resolution no. 22713 of 24 May 2023, whereby, pursuant to Article 99, paragraph 1, letter b), of the Consolidated Law on Finance, Consob implemented the precautionary suspension measure, for a period of ninety days, of the offer to citizens residing in Italy involving an investment of a financial nature made including through the website https://luxemcapital.com;

WHEREAS Luxem Capital Inc. has sent no objections in response to the facts on which the suspension measure is based;

HAVING ESTABLISHED that on 2 June 2023, the Luxembourg Commission de Surveillance du Secteur Financier (CSSF) published on its website https://www.cssf.lu a warning concerning "the fraudulent activities carried out by the entity (website: )”;

WHEREAS in the light of the preliminary findings reported above and in the absence of any evidence such as to lead to a different qualification of the case with respect to the one represented in the aforesaid provision suspending the offer (Resolution No. 22713 of 24 May 2023), the factual and legal circumstances set out in said provision shall be deemed to have been confirmed;

CONSIDERING, therefore, that it has been ascertained that - according to the methods described above, noted at the time of adoption of the said suspension measure - an offer to the public has been made of products that qualify as an “investment of a financial nature“ in breach of the above law;

HAVING REGARD to Art. 99, paragraph 1, letter c) of the Consolidated Law on Finance, pursuant to which Consob may “prohibit the public offering if a violation is confirmed of the provisions of this Chapter or of the related implementation measures or if there are well-founded suspicions that such provisions or measures might be breached...”;

RESOLVES:

The offer activity to the public residing in Italy concerning "Investment Plans" called "Starter", "Professional", "Business" and "Enterprise" made by Luxem Capital, Inc. through the website https://luxemcapital.com is prohibited.

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.

26 July 2023

THE CHAIRMAN
Paolo Savona