European Crowdfunding Network Reports Two Estonian Crowdfunding Platforms to Enforcement Authorities as Questions Arise Regarding Withdrawal of Funds

The European Crowdfunding Network (ECN) has reported two Estonian debt-based crowdfunding platforms to the relevant regulatory authorities in light of numerous complaints received by platform users.

According to ECN,  Kuetzal and Envestio, both lending platforms, may be in trouble:

“ECN has received a large number of inquiries by concerned investors who have not been able to withdraw funds from their accounts nor claim to have received any communication from the platforms. ECN cannot judge at this point in time if the platforms have acted in breach of law. But the overall situation does not seem adequate. We hope that the situation at both Estonian platforms, Kuetzal and Envestio, is temporary and wish both investors and platform a quick and positive solution.”

ECN has attempted to contact both platforms.

Kuetzal was unable to provide “satisfactory information that would clarify the situation.”

The Envestio website has shut down and is currently generating a 404. ECN received no response from their inquiries.

On January 21st, Envestio tweeted about “well-planned set of actions aimed to cause significant financial and reputational damage.”

The blog post, similar to the home page, is no longer available.

Crowdfund Insider was able to recover the Envestio post, shared below:

Dear Investors,

We would like to address all our clients, investors, borrowers and other counterparties with the following very important issue. We proudly declare that till present moment Envestio managed to fulfill on time and in good faith all financial obligations to all contractual investors and borrowers, despite the very unfavorable situation in the crowdfunding market, provoked by the uncertainty and potential fail of Kuetzal platform.

Simultaneously with the recent concerns within the industry, we tracked repeatedly various technical attempts targeted to influence dramatically on stability of Envestio platform. They were performed through hacker attacks on our web site and platform’s internal structure and database.

At the same time, we noticed that destructive public relations campaign against Envestio has been initiated and which consisted of spreading knowingly false and unconfirmed information by numerous internet resources questioning financial stability and reliability of our platform, denigrating the reputation of the Envestio owners and key employees.

We tend to consider these attempts as a consistent and well-planned set of actions aimed to cause significant financial and reputational damage, as a result of which the Envestio platform should inevitably begin to experience substantial difficulties with current payments to its investors.

We assume that the ultimate goal of all these actions is to devalue overall Envestio’s business, and the subsequent potential raider takeover of the company or an attempt to eliminate the company from the industry, getting rid of as strong competitor. The implementation of the aforementioned scenario is evidenced by a number of factors and hostile actions that occurred precisely at the moment when a serious crisis of confidence reigned in the crowdfunding market and which actually was caused by the scandal surrounding the activities of the Kuetzal platform.

Envestio strongly condemns any actions aimed at further destabilizing the current crowdfunding market situation and disrupting the activity of the Envestio platform, as these factors together can lead to an uncontrolled solvency crisis, influencing not only Envestio but also other industry participants


Regarding Kuetzal, one P2P blogger bluntly called the site a scam.

Crowdfund Insider Senior Contributing Editor Therese Torris shared the following comment:

“Scam, incompetence or sabotage, this incident is a reminder to investors that crowdlending is risky. The positive track record of longstanding Baltic platforms such as Bondora, Mintos or Twino does not mean that every lending platform that comes out of the Baltics is to be blindly trusted”

In Europe, currently, crowdfunding laws are relegated to the national level but at the end of 2019, the European Commission agreed, in principle, to establish harmonized laws. These new regulations are expected to be implemented at some point in 2021. Harmonized laws are also expected to incorporate a degree of European wide investor protection requirements.

In Estonia, there is no bespoke regulation pertaining to crowdfunding beyond existing law.

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