The table lists the loan originations of p2p lending marketplaces for last month. Mintos* leads ahead of Zopa and Ratesetter*. The total volume for the reported marketplaces in the table adds up to 660 million Euro. I track the development of p2p lending volumes for many markets. Since I already have most of the data on file, I can publish statistics on the monthly loan originations for selected p2p lending platforms. This month I added Bulkestate*.
The table lists the loan originations of p2p lending marketplaces for last month. Mintos* leads ahead of Zopa and Ratesetter*. The total volume for the reported marketplaces in the table adds up to 690 million Euro. I track the development of p2p lending volumes for many markets. Since I already have most of the data on file, I can publish statistics on the monthly loan originations for selected p2p lending platforms. I removed Boldyield as the platform has paused lending and repayed all investors (including accrued interest).
Milestones in cumulative volume lent crossed this month:
I am looking forward to attending the P2P Conference 2020*, which takes places in Riga on June 19th/20th. If you want to go too, you can order your tickets using this link P2P Conference 2020* together with code Claus for 20% discount (click on ‘enter promo code’ on the page where you enter the ticket quantity).
I went to the conference last year and enjoyed it. You can read my article about it here.
This year I plan to arrive a few days earlier (on the 16th) in Riga, using the time to meet up with platform representives. I also plan to organize a lunch or dinner meetup for P2P-Banking readers so we can chat and discuss current p2p lending developments. If you are interested send me an email and I’ll inform you once the planning is further advanced.
The website is down. Several investors voiced complaints on Facebook, Twitter and forums, about not receiving withdrawals within 5 working days, the time-span that the company used to tell investors is the normal processing time. Social media profiles of several management members were deleted today. The European Crowdfunding Network reported them to authorities after receiving multiple investor complaints.
The platform Envestio was launched in spring 2018 and promoted business loans of a wide variety of types (crypto, real estate, working capital, …). Founded by management with Latvian origins the platform was officially run by Envestio SI OÜ, a company registered in Estonia. Business loans (not consumer loans!) are currently not subject to specific regulations in Estonia.
Initially most of the offered projects came with loan sizes of 100K EUR to 300K EUR, but recently offered projects got much bigger. Offered interest rates where high, often around 20%. Shortly after the start, Envestio started to offer a ‘buyback guarantee’ (later renamed ‘Repurchase Guarantee‘) under which it would repurchase loans prematurely for a fee of 5% should the user request it.
To date Envestio seems to have collected around 33M EUR of investor money from about 13,000 investors throughout Europe (number according to Envestio website before it went down). Analysing web traffic, which probably correlates to investments, I would estimate that most of the investors came from Italy, Denmark, Spain, Germany and Portugal.
All seemed to go well for Envestio. Certainly the investments looked extremly high risk. I never invested as it was way beyond my risk appetite, but nobody suspected a scam.
In summer 2019 the company announced it was sold to a new owner.
Then there were allegations from an anonymous Twitter account (@RPeerduck, meanwhile deleted), published on Dec. 18th 2019. These linked the new Envestio COO to fraudulent promotions for an investment scam years ago. I asked the Envestio management for comment and received an email explanation on Dec. 20th, 2019, in which the COO said ‘… At the same time, the only personal experience in this sphere that I have is making a presentation of crypto-project, management of which was able to prove that their company can be trusted and does not have any signs of scam at the moment of making this presentation.. ‘. I did not find the offered explanation convincing at all.
Combine that with a media article in the Latvian press where a team member of Envestio was accused of misconduct in a former job (she denied any responsibility or misconduct), that left me wondering if Envestio is complying with all legal obligations.
All these bits of information were discussed on various forums. Nevertheless many investors seemed undeterred. As late as yesterday many investors on Facebook were defending Envestio’s arguments. The last one was a DDOS attack by hackers that disrupted the service.
The last withdrawals payouts that users actually received according to investor postings, were requested on or before the morning of January, 12th.
The last statement Envestio published on its Facebook page yesterday reads ‘…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. …’
What options of actions do investors have?
Investors believing that they are victim of a fraud could complain to the authorities e.g. the Estonian police, email firstname.lastname@example.org . Clearly state what you are complaining about, provide documents, state your identity. I reached out to the press department of the police today, but have not yet heard back from them.
Investors could also elect to have a lawyer represent their interests.
EDIT: 23.01.: One team member posted claiming innocence/not knowing what was going on (I have no means to verify if the post is really from the person with that name)
EDIT: 23.01., 14:50: Statement from a press officer of the Estonian police in response to the inquiry of P2P-Banking: : ‘In the past few days, the Estonian police have received several complaints regarding the crowdfunding platform Envestio. We are currently working to specify all details, but there is no investigation underway. However, if signs of crime do surface, we will start an investigation.Head of the Fraud and Economic Crime Division of North Prefecture Juhan Ojasoo: „Not every unsuccessful investment is fraud, however, if one really believes they have been deceived, we encourage to get in touch with us.“
A statement can also be submitted via e-mailing email@example.com and describing the case in as much detail as possible. We ask to provide contact details, amount of money lost, dates for transacations etc.
We also advise checking the Estonian Financial Supervision and Resolution Authority website for alerts prior to investing in any company: https://fi.ee/en/alerts.’
EDIT 24.01., 14:59 There are serious concerns (source) too, regarding the Estonian platform Monethera. Monethera has claimed a relationship in the past with Richly Pacific International Ltd, from Hong Kong, register number 1543697. A search in the document register shows that this company was dissolved in December 2018 already. EDIT 24.01. 21.32: Monthera stated ‘It’s a mistake and we already contacted Hong Kong companies register’
EDIT: 24.01. 17:35 Further concerns surfaced about Wisefund, a company with a model that has similarities to Monethera. An investor claimed a borrower listed on Wisefund denies having asked for a loan . There is a statement that Wisefund gave to another investor as an explanation, which does not convince me personally. You can read about this here.
EDIT 24.01. 18:03: J. V. (name shortened) on FB has shown a direct connection between a team member on Monethera and Envestio. The team member owns 50% of the sponsor Baltic Real Estate Holding (Barona 72 sponsor) which was a project on Envestio.
EDIT: 29.01.: 15.23: Update by Estonia police to P2P-Banking.com: ‘This week Estonian police began a criminal investigation regarding Envestio. The case is being investigated as investment fraud.‘
Head of Economic Crime Bureau of Central Criminal Police Leho Laur told P2P-Banking: ‘We have received a large number of appeals from people who have invested into the crowdfunding platform Envestio. Majority of the appeals are from people outside of Estonia. We are currently working through the statements received and communicating with other Estonian investigative organisations, who have also received complaints regarding Envestio. We know that the number of people who have put their money into Envestio is even larger, thus, we are likely to receive more complaints.
Our first objective in the investigation is to find out wheter it was fraud and the platform was created with the purpose of deceiving people or the website was closed due to a bad investment. It is also important to identify the people connected to this company and determine, wheter the crime was committed in Estonia or elsewhere. This is an investigation that has many parties and we will be cooperating internationally as well.
The Economic Crime Bureau of Central Criminal Police is working to establish how money was moved between accounts. Usually, in international fraud, the money is quickly moved between accounts in different countries until it is withdrawn through an ATM. Due to this, the chance to recover the money is small.
Most active crowdfunding platforms are trustforthy, but we recommed to always check where you are placing your money.‘
State prosecutor Sigrid Nurm told P2P-Banking: ‘Before investing into a company, it is necessary to do some background work and check where exactly the money will be placed. A promise of a high return and claimed amount of people involved or money invested, should not be viewed as guarantees. We recommend to look past advertisements, social media posts and websites, and to look into the background of the company in more depth. Look into open source registries, consult with your home bank or a local Financial Market Supervision Authority. It is also important to remember that every investment carries a risk and losing money does not necessarily mean that it was fraud.
A statement can be submitted by e-mailing firstname.lastname@example.org and describing the case in as much detail as possible. We ask to provide contact details, amount of money lost, dates for transacations, description of what happened etc.
Currently we have no reason to believe that the two platforms, Kuetzal and Envestio are connected.‘
EDIT 29.01., 21:48.: After looking at documents compiled by Envestio investors on Facebook regarding the status of individual loans I believe the potential damage caused by Envestio is closer to about 22 million EUR (plus uninvested cash lying in accounts) This is because at least 13.98 million EUR loans are in the status ‘repaid’ I assume that investors mostly reinvested (or withdrew) that money. While the 22 millions are lower than the 33 million EUR mentioned at the top of the article, it is still a huge amount.
EDIT: 31.01., 18:45: Estonian police publishes a ‘FAQ’.
EDIT: 02.02.: According to a press article, Latvian police have not opened an investigation but promises to support Estonian police if necessary
The table lists the loan originations of p2p lending marketplaces for last month. Mintos* leads ahead of Ratesetter* and Zopa. The total volume for the reported marketplaces in the table adds up to 594 million Euro. I track the development of p2p lending volumes for many markets. Since I already have most of the data on file, I can publish statistics on the monthly loan originations for selected p2p lending platforms. This month I added Boldyield*. I removed Landbay (institutional only now) and Lending Works (monthly data not available anymore).
Milestones in cumulative volume lent crossed this month:
In June Mintos* introduced the Invest & Access product which was designed to make it as easy as possible for investors to invest on Mintos. You can read my article about the introduction here. One main aspect offered was that it promised high liquidity, which came with the disclamer ‘you should be able to access your money anytime under normal market conditions’. Another restriction was that this applied only to current loans, so with a typical portfolio of about 20-30% lates, investors could cash out about 70-80% of the portfolio fast.
I doubt that many investors observed the “under normal market conditions” part of the offer. And those who did, probably saw it as a theoretical definition, rather than a real possibility.
Well now, 6 months later, we observe the first time Mintos Invest & Access have left the ‘Normal market conditions’ state. Investors requesting withdrawals from their Invest&Access account since Friday report they received only part of the requested amount so far (about 700 out of 2000 Euro here; and 780 out of 9800 Euro here; there are further examples known to me.). Several investors expressed surprise that they could not cash out current loans fast. Cashouts requested up to Thursday are reported to have been completed as expected
The cause of course is that the liquidity of Invest&Access is dependent on Mintos being able to sell the loan part of investors wanting to cash out to other investors.
On Friday around noon, the Central Bank of Kosovo announced that it had revoked the licenses of Monego and Iute Kosovo loan originators which both had loans listed on Mintos. In the afternoon many investors sold loans from those originators through the Mintos secondary market until Mintos suspended the trading of these loans around 5:04pm (CET). Following these occurences this seems to have for the first time on Mintos created higher cashout demands than requests for investing on reinvesting on the Invest&Access product and this is why some investors are seeing partial/delayed withdrawals currently. It is unknown whether the I&A product has a buffer to soften the impact of such cases, but it seems not (or it has been depleted in this instance)
Edit to clarify: the Invest&Access product behaves as described in the small print, it is just that some investors seem to have different expectations and gauged the associated risks differently. Investing in p2p lending is a high risk investment.
I’ve contacted Mintos for comment on the current liquidity situation of I&A but have not yet received a reply.
If you are an Invest&Access investor and want to cashout, you might not be aware that you have the option to normally list the loans on the secondary market. Therefore if you want to skip the invest&access selling queue (which I assume exists), you can just list your loans. Offering 0.1% to 0.2% discount might be sufficient to sell them. I am not advocating this, just informing you that it is possible to try that.