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Swiss regulator shuts down rogue crypto school

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Switzerland is home to many blockchain and cryptocurrency non-profit foundations. Keystone / Robert Ghement

A Swiss cryptocurrency scheme, purportedly set up for educational purposes, has been shut down by regulators having “seriously violated supervisory law”.

The Dohrnii Foundation and its founder Dadvan Yousuf sold more than CHF6 million ($6.7 million) worth of crypto tokens without the required financial licence, said the Swiss Financial Market Supervisory Authority (FINMA).

The operation also accumulated some CHF1.5 million from investors after being launched by Yousuf, a Kurdish refugee who hit media headlines for allegedly making millions from bitcoin investments.

The project issued and sold DHN crypto tokens that were meant to operate a platform intended to educate users about cryptocurrencies.

“The Dohrnii platform was never operational and the DHN token could never be used in the way described,” said FINMA on Wednesday.

The Dohrnii Foundation was found by FINMA to be “acting as a financial intermediary without authorisation”. In addition, Yousuf “accepted public deposits as a private individual without authorisation”.

Neither Yousuf or the foundation cooperated with a FINMA investigation that opened a year ago.

The regulator issued cease-and-desist orders against the foundation, which is in the process of being liquidated in canton Zug, and against Yousuf.

Rags to riches tale

Several Swiss media report that prosecutors in Bern have launched criminal proceedings against Yousuf for alleged fraud. FINMA has no powers to issue fines or launch criminal proceedings.

Yousuf generated media headlines in 2021 with his rags-to-riches story since fleeing to Switzerland with his family from Iraq at the age of three.

Yousuf told journalists that he had made millions from buying bitcoin and set up the foundation in Switzerland in 2021 with the reported aim of educating others about cryptocurrency opportunities.

FINMA’s ruling can be appealed to the Federal Administrative Court.

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