So what’s going on?
On 12th January 2020 Kuetzal announced wind-down and just 10 days later we have a major problem with Envestio. Their website has been down since January 21st, they claim their site is under DDoS attack. Furthermore, they have not posted anything to their FB page, Twitter or answered any emails regarding the topic, all of this is quite worrying. Maybe they are already on the run?
OK, stop for a minute and calm down! Nothing is 100% sure, but please read this article before making any decision. Maybe Envestio is having technical difficulties. Or maybe not, only time will tell.
What is Envestio?
Envestio started as a private investment fund in 2014 and now is one of the leading companies in the industry of “New Finance” or “Finance 2.0”, which offers investors from different countries premium investment opportunities through online crowdinvesting marketplace. At Envestio they offer to the public investors only those investment projects, which successfully passed a thorough and unbiased due diligence process, conducted by our professional team.
Is Envestio a scam? – Will another P2P platform bite the dust?
The short answer most probably is YES, Envestio is a scam.
The red flags started popping up about half a year ago, but I think that most important fact is that in the middle of the summer (2019), Envestio had a change in ownership and change in management in December.
So I will try to keep the long story a little bit shorter and start at the summer of 2019.
In the middle of the summer 2019, Envestio has been acquired under new ownership.
November 22nd 2019 – TORCH Report: Envestio
Ido from Colminey.com publishes one of his infamous TORCH reports, this time it is about Envestio – TORCH Report: Envestio
To maintain the integrity of a surprise inspection, the report was not sent to Envestio prior to publishing. However, Envestio is welcome to post a reply or send me an official comment.
As always, readers are encouraged to share this report and echo their concerns to the platform. Our goal is not to shame platforms, but to push them to improve. Reevaluations will occur over time.
X Track record
Envestio fails this topic for several reasons:
1. Time in business: The About page states Envestio’s year of incorporation as a private investment fund, 2014, but does not mention the time they launched the public platform, December 2017. This makes the platform look much older than it actually is.
2. Investor count: Envestio’s Homepage shows the number of “registered investors”. This is a false terminology: The act of signing up to a website does not make one an “investor” but a “user”. Honestly, no one cares how many users have signed up to a website. Instead, Envestio should show the current number of active investors – people who have money invested on the platform right now.
3. Portfolio growth: The top of Envestio’s homepage highlights the cumulative loan volume. To see the current portfolio size and monthly figures, users need to scroll all the way down to this chart:
It’s excellent that the chart includes both “made investments” and “exited investments”, which allows the viewer to extrapolate the current portfolio size (the gap between the two lines). However, the chart is too basic. Instead of a dynamic chart which updates automatically and allows users to hover their mouse to see exact numbers, Envestio uses a static image which needs to be updated manually (and is often outdated), which only conveys the general idea that “we are growing” with not enough concrete numbers.
Worse, Envestio is missing a chart for monthly loan volume – a TORCH requirement.
Envestio’s annual statements are not published on the platform.
Not addressed on the platform. This can be included in annual statements.
Sadly, Envestio has failed the majority of the TORCH criteria. In their defence, I believe that most transparency-related issues are the result of neglect rather than intentional concealment. Envestio has not fully adapted to the fact that it is no longer a private investment fund, but a public crowdfunding platform, where higher standards of transparency are expected.
The bare-boned website is missing detailed information and statistics, and is not secure enough. The buyback guarantees are an excellent selling point for Envestio, but may lead to its collapse. Remember: All investors combined can withstand a loss of €2m, but Envestio itself probably can’t.
With plenty of investors rushing to fund every new project, it’s easy for Envestio to disregard my criticism. However, everything will change at the first sign of trouble: a hacker attack, a large default, an economic downturn causing a series of defaults, a scandal involving a borrower, or some other panic-inducing event leading to mass withdrawals – all of these can put Envestio in a difficult spot.
Envestio’s great track record still makes it a good addition to investors portfolios – but the level of exposure needs to be adjusted to the risk. I only hope they fix their shortcomings before they are tested by fire.
Read more of TORCH Report: Envestio – https://colminey.com/torch-report-envestio/
December 2nd 2019 – Changes in management
Envestio posts an article to their blog “Attracting A Strategic Investor, Envestio Adds To Its Management Team”.
Envestio is happy to announce that starting with 27 November 2019 Mr. Eduard Ritsmann, an
experienced sales person, who has more than 20 years long outstanding track record in
international sales and project leadership, is joining Envestio team as the new COO and
Development Director. This appointment follows the acquisition of the platform by a strategic
investor from Germany, Mr. Arkadi Ganzin. Mr. Ganzin has great experience in German banking
industry where he was working prior to starting his own oil and gas products trading venture.
The acquisition will bring Envestio onto a brand-new level by adding up to the project the solid
experience and wide business network of new team members.
In his turn, the former Envestio COO Evgeniy Kukin, after spending almost 2 years in the leading
role in the company, will continue working as General Advisor at least for six more months
following the acquisition. Under the leadership of his team, all members of which are staying
with the company, Envestio has become a stable and secure partner for almost 13 thousand
European investors with total investment in excess of EUR 30.8 million in less than two years. A
stable and user-friendly platform infrastructure with vast potential for further development has
been created from scratch. The company has also established good cooperation with European
commercial banks, which is the basis for secure financial management and further growth.
“Now, in the context of the general economic stagnation trends, it is essential to
strengthen the company’s management team and to implement innovative solutions
by setting new, ambitious goals. We are pleased that Mr. Eduard Ritsmann has joined
our team as the new COO and Development Director. Mr. Ritsmann is in command of.
December 30th 2019.
Ido from Colminey.com releases an article “Envestio news“. The article also includes questions about the Kuetzal scam.
Your competitor platform Kuetzal is currently undergoing a large-scale crisis involving potentially fraudulent projects, a change of management, mysterious owners with a history of financial crime etc. There is very high likelihood that we are witnessing the first collapse of a Baltic crowdfunding platform right now. While the timing is coincidental, some investors are already drawing similarities between the severe issues on Kuetzal and some of the recent changes to Envestio.
If you are unable to convince investors that everything about Envestio, its management and its ownership is 100% legitimate and transparent – the panic from Kuetzal will inevitably spread to Envestio, whether justified or not. This is a crucial time that requires heavy media presence, detailed and honest responses, and an increase in transparency.
January 9th 2020 – The current situation at Envestio
Marian from Financiallyindependent.eu publishes an article about Envestio “The current situation at Envestio“.
As I briefly mentioned in my last portfolio review there has been and still is quite some talk on the blogs and discussion boards about the new management of Envestio. Many feel that the new owner and COO of the platform are not trustworthy due to their past professional career. Also, some people seem to be afraid that Envestio is a scam and that their investments will not be paid back. This fear might have been triggered by what is going on at Kuetzal right now. The performance of Envestio speaks a different language, though. Let’s take a look at the current situation at Envestio.
Envestio was bought by German investor Arkadi Ganzin. He was apparently mostly involved in the banking sector and now runs his own oil trading business (Compañia Española De Hidrocarburos 2019 Sl). There’s not much more information to be found about him which I find neither good nor bad. He is a private person. Nonetheless, it would be nice if Envestio shared Mr Ganzin’s vision for Envestio’s future as a p2b investment platform.
Mr Eduard Ritsmann joined Envestio as the new Chief Operational Officer (COO). The former COO Mr Kukin will stay involved until at least the end of 2021. Based on what I read on the web, the main criticism of the change in Envestio’s management evolves around the person of Mr Ritsmann.
He worked in many different areas and at some point represented or promoted (officially or unoffically) a company named ROSCH Innovations. You can read Mr Ritsmann’s statement about this episode of his professional life here. Amongst other products, Rosch promotes a machine that essentially produces energy out of nothing, hence a perpetuum mobile. Anyone with a background in science will take one look at this concept and know that this is bogus.
Apparently, Mr Ritsmann did see things differently or does not have the proper background to judge such technologies. I do not know. In any case, he promoted this technology at least once at some sort of conference. There used to be a YouTube video of his presentation but it now seems to be offline.
As a person with a background in science (I hold a PhD in chemistry) I find it strange that Mr Ritsmann was not more critical about this “magic machine”. But then again, different people have a different take on technology. Also, I do not see how this relates to his function at Envestio which is a completely different business. In other words, I will judge him based on his performance as COO of Envestio. Judging by the professional career that he posts on Linkedin he has the experience for the position as COO.
January 10th 2020 – Should you stay in Envestio or move out?
Euromoney.blog publishes an article “Should you stay in Envestio or move out? | Why I moved my money out“. Listing his concerns with Envestio.
Change #1: a new COO (Rittsman)
When a young company has a change in leadership it’s always a reason for concern. You can expect that you will want to know why leaderhship was changed, and mostly what the new COO is about. What are his values, and what makes him the right person to give your money to. Because these platforms are often about rust. You expect this person to be trustworthy of your money.
I already commented in my previous portfolio blog post that I was very concerned about this as he was involved in selling a Pertetum mobile.
Reason #6 I got more cautious after the Kuetzal scam
I admit it, when losing 4% of my p2p portfolio overnight with Kuetzal (ok its not sure yet I will lose it all, but right now I am giving it a 60% chance of total loss) I got a lot more careful. As a beginning investor making money seems more important sometimes then keeping your money safe. I changed a lot, and noticed there is Risky and safer p2p investments. Even if the safer give less interest, in the end they have a big chance to come out on top.
January 12th 2020 – Interview with “Roasted Peerduck”
Roasted Peerduck was an anonymous Twitter account that was launched in November 2019 and the account was deleted by him in the middle of January, because he got numerous threats to his life, he didn’t feel safe anymore.
In the ExploreP2P interview with Roasted Peerduck, Oscar from ExploreP2P asks:
You’ve been getting bombarded with questions about other Baltic sites. What do you want to say about them?
I want all to remember – I am not a newborn prophet, I can only point out some non-ethical or potentially harmful moves. For now I know that Kuetzal is a scam, Envestio did some dirty tricks which in total are heavy and enough to start investigation on them by both police and bloggers …
Read the rest of the interview here – https://explorep2p.com/rpeerduck/
January 12th 2020 – Some progress in the Kuetzal scam
Marian from Financiallyindependent.eu publishes an article on the topic of “Some progress in the Kuetzal scam”.
It becomes more and more obvious that Kuetzal was a complete scam. Many of the loan projects posted on Kuetzal’s website do not seem to be real and it is currently unclear if the funds that were deposited by investors were ever actually used to fund these projects. More and more information is being uncovered every day and and least now it seems that there is some progress in the Kuetzal scam.
In order to stay up to date on the legal case that is being built and to stay in touch with other affected investors I recommend to join the Telegram group @kuetzaldiscussion. Also, there is a Facebook group for the same purpose.
January 14th 2020 – The Kristaps saga
Kristaps Mors, Founder & CEO at PowerMiningFarm and MaxTraffic.Com, also an investor, decides to check out one of the Envestio’s project, which is based in Riga.
I saw that some people have concerns regarding Envestio, and as I live in Riga, I did a quick research on one of their projects – hope it helps.
After publishing his finds in his blog, just a few hours later it was taken down by Kristaps and he republished it on another platform – https://kristapsmors.substack.com/p/envestio-what-is-behind-high-yielding-projects
It is not crystal clear why Kristaps took down the post and then published it elsewhere. In fact some other investors thought that he was threatened by Envestio.
Kristaps confirms that he is OK and was not threatened.
Also, out of the blue, Envestio official Facebook page starts name calling Kristaps in the public comment section. Which is extremely unprofessional and shows how high the tensions are.
January 15th 2020 – Envestio reacts to Kuetzal panic
January 18th 2020 – A very tense P2P atmosphere
Basil from Harvestingassets.com publishes and article on the topic of “A very tense P2P atmosphere“.
The current P2P space is facing quiet the turbulence and this is very normal within money investment streams. It actually reminds me of the crypto space when Bitcoin lost 80% of its value. With the latest Kuetzal news came lots of panic selling on every platform and rightly so, nobody likes losing money. I was one of the affected investors who lost my capital, and although it’s not much this will serve me (and us) a good lesson for the future.
Continue reading – https://harvestingassets.com/a-very-tense-p2p-atmosphere/
January 21st 2020 – Envestio releases a statement
Probably one of few screenshots of Envestio’s website still running on January 21st. As you can see, there were 35 377 138€ invested.
January 21st 2020 – Envestio’s web site down
Just a few minutes after the Envestio’s Tuesday post on Facebook, Envestio’s web site is somewhy displaying “404 Web Site not found.” error.
January 21nd 2020 – DDoS attack or was it?
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.
Envestio claims that they have been under attack by hackers. But an expert, with 15 years of experience as a web developer, steps in to close the door. He mentions out that “A 404 page suggests the website has been deleted and everything is gone”.
January 21st 2020 – Envestio’s latest blog post
Just few moments after the blog post was published, Envestio tweeted it out that “There are well-planned set of actions aimed to cause significant and reputational damage, as a result of which the Envestio platform should inevitably begin to experience substantial difficulties with current payments to its investors. More:”
January 21st 2020.
Investor Domenico Cervo aka FinanceShot publishes an article “I Probably Lost 5.7% of My Portfolio“.
I’m starting to think that Envestio is a fraud. However or the moment nothing is sure, but I’m writing this article to let you know that if you have invested in Envestio like me, you should pay attention to how things evolve in the next days.
I will add any news and updates to this article. In the meantime, all I can do is accept that I have lost 5.7% of my Investment Portfolio.
January 22nd 2020 – ECN reports Kuetzal and Envestio to NCA
Since late 2019, the Estonian crowdfunding sector, especially regarding lending-based platforms, has seen heightened scrutiny and potential fraud. The difficulties appeared so far at two platforms operating out of Estonia, specifically Kuetzal and Envestio. 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.
Kuetzal : ECN has over the past weeks repeatedly been contacted by concerned investors in lending-based crowdfunding platform Kuetzal, Estonia. It has become apparent that at least since a change in management in the second half of 2019 the operations of the platform is lacking in its response and conduct with investors. ECN has reached out to the platform’s new management for clarification but did not receive satisfactory information that would clarify the situation. ECN cannot not judge if the platform has acted inappropriate toward its investors. ECN has notified the relevant authorities with regard to Kuetzal and a criminal investigation has been launched by the General Prosecutors office: https://www.prokuratuur.ee/en/contacts/office-prosecutor-general
Envestio : Similarly, on 21 January 2020 lending-based crowdfunding platform Envestio has shut down its website and posted inconclusive messages on Facebook with regard to technical issues. ECN has reached out to the platform for clarification but not received any feedback. In the meantime many investors have also reached out to ECN. ECN cannot judge if the platform has acted inappropriate toward its investors. ECN has notified the relevant authorities with regard Envestio on 21 and again on 22 January 2020.
To-date, there is no specific legislation for crowdfunding in Estonia with the exception for activity which corresponds to subsection 2 (2) of the Creditors and Credit Intermediaries (CCIA), according to which: “The provisions of this Act concerning a credit intermediary also apply to such a person that intermediates credit granted by a person that does not operate in its economic or professional activities as a creditor and is not a creditor for the purposes of this Act.).”
Please be advised that as a consumer, with the current situation with both platforms, you are best advised to assume fraud or suspected crime and should make a relevant claim with the Estonian Police and Border Guard Board, which can be reached here: https://www.politsei.ee/en
January 22nd 2020 – Envestio makes it to the Estonian news
First article at Äripäev – “Next crowdfunding platform scares investors – €31 million trapped.”
Article – https://www.aripaev.ee/borsiuudised/2020/01/22/jargmine-uhisrahastus-ehmatab-investoreid-loksus-on-31-miljonit-eurot
Second article at Delfi – “Investors fear yet another Estonian crowdfunding platform will disappear with their money”
Article – https://arileht.delfi.ee/news/uudised/investorid-kardavad-et-jarjekordne-eesti-uhisrahastusplatvorm-kaob-nende-rahaga?id=88721131
January 22nd 2020 – Millions at Stake in Envestio
P2P-Banking publishes an article “Millions at Stake in Envestio case – Investors Calling for Answers“
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.
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.
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 email@example.com . 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.
Read more about P2P-banking.com published article – https://www.p2p-banking.com/countries/baltic-millions-at-stake-in-envestio-case-investors-calling-for-answers/
January 22nd 2020.
Angelo from P2Pinvesting.eu updates his article “I’m Leaving Envestio, Monethera and Wisefund (Here’s Why) – Updated!”
I feel sick to my stomach right now.
I’m having a hard time realizing that it’s possible Envestio has been scamming everyone and I feel like a complete idiot. I can’t explain what happened over the past few days any other way:
- None of my withdrawals (the first one was on January 15th, at 19:29) arrived. I’ve now heard from other investors that they have yet to receive withdrawal requests they placed on January 12th. And yet, Envestio sent out an announcement on the 15th, “reassuring” investors they had sufficient reserves of 500.000€ – 800.000€ for buyback.
- Envestio’s website has been offline since yesterday. Supposedly, because of hackers, but to me that feels like an excuse right now to buy more time.
- They never responded to the e-mail I sent them on Thursday, in which I asked them for clarification on the concerns I shared.
- It seems as though they haven’t responded to anyone via e-mail or social media since yesterday.
Right now, people are discussing what steps we as investors can take both on Facebook and in a Telegram Group. I’ll be honest, I don’t know what the right course of action is in this case, as nothing like this ever happened to me before.
Here is what I can tell you, even though it may mean nothing to you. In case you had some of your money on Envestio as well because of me and the current situation doesn’t end well, I’m deeply sorry.
I should have never been so naive to look over the concerns I was starting to have, assuming everything was fine in the background because of all the praise from the community. I should have acted much sooner than I did. A part of me is still hoping last week’s video wasn’t too late.
In a worst case scenario, I can take the loss. I deserve it for my ignorance. But for everyone that’s now involved in this mess because of me – I should have never let this happen in the first place, I’m sorry.
January 22nd 2020 – Very sad days
Ido from Colminey.com updates his article “Envestio news“.
Yesterday morning Envestio declared that it was under a hacker attack. Shortly after this declaration their website went down, and hasn’t been restored since. Eugene Kukin has either deleted or hid his social media profiles. Other team members are not responding to messages.
The common belief in the community is that this is Envestio’s “exit scam” – a guise to cover their decision to abandon a sinking ship. Personally my last shreds of hope were evaporating throughout yesterday, as no further communication was made to clarify the situation.
If I felt that Envestio was always meant as a scam (as is most likely the case with Kuetzal), I would not have been surprised. But I still believe that Envestio started out as a legitimate business, lending money to tens of legitimate borrowers (some of them were contacted yesterday and confirmed it). I simply cannot wrap my head around the fact that a legit business appears to be winding down operations in such a bizarre and careless way. “Well, we’re screwed, let’s blame it on hackers and vanish.” As if some excuse is enough to make thousands of borrowers forget about ~14m euros (latest estimate).
Very sad days.
January 22nd 2020 – Envestio’s great vanishing trick
Euromoney.blog publishes an article on the topic of “Envestio’s great vanishing trick: how to make over 30 Million of investments disappear?“
This is post I hoped I would not have to write. I really feel badly for having made the right decision for once. I wish I was wrong. I hate having to write another negative post about peer to peer investing.
Panic on the peer to peer markets as investors are scrambling to organize and find out what is happening to Envestio. In one of my previous blogs I explained I did not trust the situation and named several reasons why I decided to leave Envestio. The change in COO, the large amounts of withdrawals I saw, and of course being extra on my guard by the Kuetzal disaster I felt no longer comfortable being in Envestio and moved out. I never claimed Envestio was a scam, and neither will I now, but the amount of red flags was stacking up fast.
What should you do if you are an investor who’s money is at risk?
If you still trust them after this you can give it another few days and see if Envestio’s website goes back online. But also consider the worst case scenario: Envestio was a scam from the very beginning (again worst case scenario!), and the hacking was not done by Hackers but by Envestio itself as a smoke screen. Taking down the Website was part of their plan to make it harder to gather evidence for investors and buy time to get away.
Time is of the essence!
The more time you lose the harder it will be to get back your funds! If you decided you no longer have faith in Envestio its time to take action.
Action #1 Connect with other investors
With over 30M of investments in Envestio you can be sure there is a lot of other investors who are eager to get some money back. First thing you need to do is get connected. There is an Envestio Telegram group “EnvestioDiscussion” that you should join.
Action #2 File a police report
This is something you could do. If you want to do this it has to be with the local police: https://www.politsei.ee/en International police will not help you.
Keep in mind police is mainly after criminals. They don’t care about your money and will not help you get it back. For that you need to go to a civil court.
Action #3 Get a lawyer
There is over 400 investors in the telegram group. Acting together will make you a lot more powerfull. A lawyer can cost around 5-10k. A lot for one investor, peanuts for the 12k investors together that Envestio has.
The lawyer should focus on two things: #1 file for Bankruptcy. There have been no repayments since mid January. Its clear Envestio has cash flow problems. #2 if it turns out the accounts are empty, then initiate criminal proceedings. If somehow you can prove this it will be much easier to get the money back. That is if there is money left. Its likely that in the worst case scenario, that this was a planned scam from Envestio, they already have left with your money the day the repayments stopped.
Remember act fast. Within the next 1-2 days you should gather and close the list of investors. By that time you will have 100s of investors gathered I am sure. Search contact with Kuetzal investors as they will have a law office to recommend to you and will have at least some experience with peer to peer cases.
Again time is of the essence, the faster you act the more chances you have to recover your money. I actually consider to contribute to support the investors if Envestio does not come above water again.
January 22nd 2020 – What to do if the site comes online again?
Georg from Crowdlendingrocks.eu releases an article on the topic of “What is going on with Envestio? Official news about cyber attacks on the platform?”
What to do if the site comes online again?
If the website comes up again, even more investors will most likely try to sell their investments. No matter if you want to sell or not, there is one thing you should absolutely do!
Click on the details for every single investment you have at Envestion to see the detail page. One thing I really do right-click and choose “Save as..” and save the page as a local html page on your pc. Do this for every single one of your investments, even if you want to sell everything.
Why is this important?
Only on the Envestio website you can see the information about who each borrower is and how big a claim you have against them! If the data is gone, it will be hard for you to prove that the borrower actually owes you money, if it should come to a trial at a later state.
January 22nd 2020 – The fall of Envestio – Some technical evidence
Radoslav from Gatevnotes.com publishes an article “The fall of Envestio – Some technical evidence“.
Maybe you have already heard about the issues with the P2P lending platform Envestio. After some noticeable instability, their website went down on 21 January and it’s still unavailable as of the time of publishing this blog post. That makes it more than 24 hours without an official statement of what’s going on their side.
So was this an exit scam? I don’t know, we’ll see eventually, but it looks like such. However, I don’t see a good enough community response given that around 33 million EUR is at stake and more than 13,000 investors have invested in it. There are merely 2-3 other posts regarding this.
Sure thing, there is definitely some panic spreading in the P2P investment world following the Kuetzal scandal which failed recently. In response to this panic trend and other concerns about Envestio, people have started withdrawing their funds using the “buyback guarantee” or as later renamed “Repurchase Guarantee” for a 5% fee. This definitely puts some pressure on those platforms!
It looks like they have closed/deleted their websites on Azure, their mailboxes on Office 365 and their blog which is hosted on GoDaddy does not open.
Currently the facts are:
- Their website is down for more than a day and it turns out their actual resources on Microsoft Azure are deleted on a purpose
- There is no official statement on what’s happening
- Envestio is not answering any phone calls or emails
- People claim that withdrawals are still blocked
- Social media profiles of several management members were deleted
- The European Crowdfunding Network reported them to authorities after receiving multiple investor complaints
Even if they were in the unlikely case of a hacker attack, they should have found a way to communicate it with investors.
January 22nd 2020 – Envestio has vanished
Hans from ExploreP2P.com publishes an article “Envestio has vanished“.
What is the situation with Envestio?
We have never given Estonian P2P site Envestio any coverage on this site, but we feel that today’s events are important and necessary to cover. Envestio was a site that focused on providing access to very high interest rate P2P loans in the Baltic region. It raised €35 million from 15,000 investors. Envestio offered very exotic loans, including the finance of ‘crypto mining rigs’, and ‘fruit factoring’?!.
What has caused this to happen?
Once Kuetzal collapsed, P2P investors quickly started paying attention to investor attention to Envestio. Many investors contacted Envestio to request that they repurchase their loans (at a 5% discount). The main reasons they did were:
Read more – http://explorep2p.com/envestio/
January 23rd 2020 – Envestio’s employee statement
Liene Meldere posts a statement, she is the Investment and Development Advisor in Envestio.
January 23rd 2020.
Thecoinrise.com releases an article on the topic of “Envestio SCAM – How to make Million of Investments Disappear?”
January 23rd 2020.
Crowdfundinsider.com publishes an article on the topic of “European Crowdfunding Network Reports Two Estonian Crowdfunding Platforms to Enforcement Authorities as Questions Arise Regarding Withdrawal of Funds“.
Article – https://www.crowdfundinsider.com/2020/01/156683-european-crowdfunding-network-reports-two-estonian-crowdfunding-platforms-to-enforcement-authorities-as-questions-arise-regarding-withdrawal-of-funds/
January 24th 2020 – Envestio is the next p2p scam
Marian from Financiallyindependent.eu publishes an article on the topic of “Envestio is the next p2p scam”
I hope that everyone who has money in Envestio has by now noticed that their website is down. Before the site was taken down, Envestio claimed to be the victim of a hacker attack. This is to 99.9% a hoax. Since the social media profiles of most Envestio staff members were deleted at the same time it is basically certain that Envestio is the next p2p scam.
The events of the past days were as follows:
- Envestio stopped honoring withdrawal requests on January 12. From what I read in discussion groups, everyone who tried to withdraw money afterwards did not receive anything. I requested a withdrawal on January 12 and never received any money.
- On January 16, Envestio made the announcement via email to investors that it can handle the buybacks and withdrawal requests and claimed to have between 500,000 and 800,000 EUR of liquidity. Also, Envestio claimed to have Mr Evgeniy Kukin reinstated as COO to calm down investors.
- On January 21 the website was deleted from its hosting platform. At the same time, Envestio claimed on their Twitter channel that they are under attack from hackers. Since then, there is no word from Envestio. The phone line is disconnected, social media profiles disappeared and email addresses have been deleted at the email service provider.
January 24th 2020 – Kuetzal is a Scam. Envestio is Gone… What to do?
Carlos from Savings4freedom.com publishes an article about “Kuetzal is a Scam. Envestio is Gone… What to do?”
Last Monday I traveled to London for a conference… and Jesus! What a hell is happening in the Baltics?
Simple to explain:
- Criminal Activity…
- Bad Management;
- Bad Business Model;
- Buyback run by investors… PUM!!!
So, Kuetzal is a criminal scam. Pressure built around Envestio and now the platform is gone. All other platforms that follow a similar business model are currently under pressure. Monethera and Wisefund decided to temporarily cancel buyback options to calm down investors… but questions arise from everywhere and everyone knows what will happen, as soon people can take their money out.
Read more about the instruction on what to do – https://savings4freedom.com/kuetzal-is-a-scam-envestio-is-gone-what-to-do/
January 26th 2020 – WHAT HAPPENED & What We Can Do Right Now
Angelo from P2Pinvesting.eu posts a YouTube video on the topic of “Envestio – WHAT HAPPENED & What We Can Do Right Now“.
After my video went live on January 15th, here are some of the things that happened:
– Apparently a lot more people asked for early buybacks on the platform, as I started to do that same evening.
– A couple of hours later, Envestio announced that they were planning to reinstate their previous COO, Evgeny Kukin, to calm down investors, that they had plenty of reserves for buybacks and that they were a poor victim of unfounded, negative rumors.
– However, we now know that nobody who asked for a withdrawal on the platform since the afternoon on January 12th, 2020 received their money. I also haven’t received any of the withdrawals I placed and probably lost 3.803,98€.
– They never replied to any of the concerns I raised, which I also sent them via e-mail the following day.
– Then, what now seems to have been a strategy to buy more time, Envestio announced that they were the victim of “hacker attacks” and that’s why their website was unreachable and as a result, they were unable to pay investors, which made little sense.
– Their website has completely disappeared since then. Thanks to an excellent article by Radoslav Gatev, we now know that they purposefully seem to have deleted their websites on Microsoft Azure- and they closed or deleted their mailboxes and blog.
January 27th 2020 – The Ministry of Finanance
Ministry of Finance expert Thomas Auväärt:
Although the first crowdfunding platforms emerged in Estonia more than a decade ago, the country has no overview of them, let alone regulations.
January 29th 2020 – Crowdfunding platform scammed 30 million euros from investors
January 29th 2020 – Police launches investigation into Envestio SI OÜ
Estonian Police and Border Guard Board Press Officer Leana Loide:
This week Estonian police started a criminal investigation regarding the crowdfunding platform Envestio. The case is being investigated as investment fraud.
Head of Economic Crime Bureau of Central Criminal Police Leho Laur explained that the Estonian police and other investigative authorities have received a large number of appeals from people who have invested their money on 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 our partners to gather all information. 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,“ said Laur.
„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,“ Leho Laur added.
Understandably, the people who placed their money with Envestio are most of all interested in recovering their funds. The Economic Crime Bureau of Central Criminal Police is working to establish how money was moved. „Usually, in international fraud, the money is quickly shifted between accounts in different countries until it is withdrawn through an ATM. Due to this, the chance to recover the money is small,“ said head of Economic Crime Bureau.
Most active crowdfunding platforms are trustworthy, but we recommed to always check where you are placing your money.
State prosecutor Sigrid Nurm said that before investing into a company, it is necessary to do 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,“ Nurm suggested.
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.
January 30th 2020 – What’s been happening since Kuetzal and Envestio vanished?
Hans Marwitz from ExploreP2P.com publishes an article on the topic of “What’s been happening since Kuetzal and Envestio vanished?”
There have been many new developments in European P2P over the last two weeks. Kuetzal and Envestio investors have joined forces to organise and plan their response since both sites vanished earlier this month. What we outline below will not be news to most of them. However the potential impact, and learnings from these platform failures will be of interest to all investors in this space, even if they were not directly impacted. We thought it could be useful to all P2P investors to provide an update on both situations, and the impact on some other sites.
Continue reading – https://explorep2p.com/latest-events/
January 31st 2020 – Estonian Police: Were Envestio and Kuetzal a fraud?
Estonian Police and Border Guard:
Estonian police has started two criminal investigations regarding both crowdfunding platforms. Our first objective in the investigations is to find out whether it was a fraud and the platforms were created with the purpose of deceiving people, or the websites were closed due to a bad investment.
What should I do if I lost money with either Envestio or Kuetzal?
Firstly, gather all information you have regarding the investment you made and contact the police. It is important that your application contains as much information as possible. Send us your contact details, describe what happened and indicate the material damage you have suffered.
We have created two e-mail addresses for this.
If you placed your money with Envestio, download and fill in the crime report form and email it to us at email@example.com. You will receive an automatic reply and we will ask you to fill out the form attached and enclose any documents in your possession relating to Envestio SI OÜ, proving that you have suffered damage. You can ignore the automated e-mail if you have already complied with the requirements set out in the letter.
If you placed your money with Kuetzal, e-mail us at firstname.lastname@example.org. If we need any additional information, we will contact you.
Can I turn to my local police?
Estonian police is cooperating with police within the European Union in order to simplify the process of making an application regardless of where you are located. You can turn to the police in your home country, and act according to the instructions you receive.
You will have to get in touch with Estonian police directly if you are located outside the European Union.
The criminal investigations regarding Kuetzal OÜ and Envestio SI OÜ were started in Estonia, thus reaching out directly to Estonian police is the fastest option.
When can I expect a reply from the police?
We have received a large number of appeals regarding both platforms. Other Estonian investigative authorities have also received many appeals regarding this issue. We are working to gather all information and we will be contacting people from whom we need more information.
There is no need to worry if the police have not contacted you – it means that your application contained all the information necessary.
We might contact you further in the investigation, for example if we need you to testify.
Will I get my money back?
Understandably, people who placed their money with either of the platforms are most of all interested in recovering their funds. Police is working to establish how money was moved. Usually, in case of international fraud money is quickly shifted between accounts in different countries until it is withdrawn through an ATM. Due to this the chance to recover the money is small.
What will the police do next?
It is important to identify the people connected to these companies and determine whether the crimes were committed in Estonia or elsewhere. In these investigations we will collect data, look into the backgrounds of the companies and people connected. Our first objective in the investigation is to find out whether it was a fraud and the platform was created with the purpose of deceiving people, or the website was closed due to a bad investment.
Is it safe to place money in any other crowdfunding?
Most crowdfunding platforms are trustworthy, but we recommend always checking where you are placing your money. It is also important to remember that every investment carries a risk and losing money does not necessarily mean that it was a fraud.
How do I recognise a fraudulent investment platform?
Before investing into a company, it is necessary to do background work and check where exactly the money will go. A promise of a high return and claimed amount of people involved or money invested are not 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. Be vigilant, if a company is registered at an apartment building or an office that houses a large number of other businesses.
Are there more such platforms?
We cannot rule out the possibility of deceitful platforms existing. That is why it is important to do background work before investing.
February 2nd 2020 – Envestio finally made it to the prime time news in Latvia
Few interesting nuggets there:
LV police has not launched official investigation yet, just “supporting Estonian police when requested”;
Envestio office at Berga Bazars was inhabited by 3 persons – Kukins, Kisiels and Meldere. Journalists could find only Kisiels at his suburban home, but he refused to speak and closed window;
Founder of Envestio Sergejevs was coursemate at SSE Riga with Kukins, to whom he sold the “unstarted business”;
Journalists went to a suspected new Envestio adress at Valdemara street, found a suspicious looking guy there and door sign was of “InLat Plus”, a different company;
Ganzin was born in Novosibirsk, Russia;
Kukin transferred his other company, Marlin Invest, to Ganzin as well;
Alesia Nikalaichyk was ““ENVESTIO” interneta vietnes konta pārvaldniece” until January 20th. Assume it means she was the legal owner of website;
Platform was registered in Estonia because it has one of the most liberal regulatory regimes in Europe.
Kristjanis FB post source – https://www.facebook.com/groups/370350036872068/permalink/622981724942230/
February 3rd 2020 – Investors demand five million euros from the Estonian crowdfunding platform
February 12th 2020 – Envestio’s Facebook page has been deleted
The title says it all.
February 24th 2020 – Black Eye: Estonia Hit by Shuttered P2P Investment Platforms
Crowdfundinsider publishes an article on the topic of “Black Eye: Estonia Hit by Shuttered P2P Investment Platforms, Impacted Investors Look for Answers“.
March 11th 2010 – Kuetzal and Envestio Update
Crowdfundinsider publishes an article on the topic of “Group of Impacted Investors Look to Mitigate Collapse of Estonian Peer to Peer Lending Platforms”
Earlier this year, to Estonia-based peer to peer lending platforms, Envestio and Kuetzal, collapsed leaving investors holding empty promises and possibly a complete loss.
At the end of January, the Estonian Police and Border Guard posted a notice asking what may end up being a rhetorical question, “were Envestio and Kuetzal a fraud?”
The police stated:
“Understandably, people who placed their money with either of the platforms are most of all interested in recovering their funds. Police is working to establish how money was moved. Usually, in case of international fraud money is quickly shifted between accounts in different countries until it is withdrawn through an ATM. Due to this the chance to recover the money is small.” [emphasis added]
Not very encouraging words.
Since January, the Police have said little about their investigation – which must be ongoing. Estonian financial regulators have been noticeably quiet as well – a disappointing state of affairs for a country that has long tried to burnish its Fintech credibility.
Recently, Crowdfund Insider heard from a group of investors that have been impacted by the demise of Envestio and Keutzal. Guillermo de la Hera, along with his wife Azucena Lancbazo are working with attorneys to advocate on behalf of impacted investors. Denis Piskunov from Magnusson Law is supporting the group from a legal perspective. It has been reported that thousands of individuals may have lost all of their money as millions of dollars have disappeared.
Earlier this week, CI spoke with Guillermo to learn more about the status of any pending lawsuit or possible action by government authorities. Our conversation is shared below.
June 3rd 2020 – Envestio declares bankruptcy
On 3rd June 2020 Envestio has declared bankruptcy – https://www.teatmik.ee/en/personlegal/14433607-Envestio-SI-O%C3%9C
September 22nd 2020 – Key takeaways
- Magnusson’s law firm initiated a bankruptcy statement against Envestio (attorney Denis Piskunov);
- Investors collected more than 80 000 euros to hire a law firm to sue Envestio;
- The first court hearing was held on 19th May 2020 (mainly administrative topics);
- Key figures in Envestio’s fraud are Kukins, Ganzins and Ritsmann – all Latvian citizens;
- It is possible to monitor the movement of the money through bankruptcy proceedings;
- Applications were also made to those, who received a loan from Envestio;
- It was discovered that the bank account owned by Envestio at Malta had nearly 212 000 euros on it;
- In total, Envestio bankruptcy reaches more than 12 million euros!
- Various companies received a loan from Envestio, such as Degre OÜ – 726 000 eur. After the money was transferred on 21.02.2020, the company (Degre OÜ) declared bankruptcy on 24.02.2020 …
- Denis requested court that Arkadi Ganz and Kaletin, who are also involved with Envestio, would also be interrogated;
- On June 3rd the court declared Envestio OÜ to be officially bankrupt!;
- The documents show that someone named Mr. Kaletin was arrested in Estonia and all of his computers and data carriers are in the possession of the police;
- Criminal proceedings were initiated in Estonia and Latvia;
- Digital back-ups related to Envestio’s documents are requested from Microsoft through the court;
- Approximately 300 000 EUR were frozen on accounts in Latvia and Malta;
- The investigation revealed that at the end of 2019 Kukins bought a luxury yacht worth 1.2 million euros on behalf of Envesti OÜ;
- Arkadi Ganz has not yet appeared before the court, he has time to do so until the end of November. Otherwise he will receive a fine or the police will bring him to the court;
- Envestio OÜ purchased 4.3 million euros worth of cryptocurrency and it has disappeared without a trace.
What are the steps you should do as an investor regarding the Scam?
Thecoinrise.com suggestions – https://thecoinrise.com/envestio-scam-how-to-make-million-of-investments-disappear-2/
Step 1 – Seeking a response from the team
- It seems clear by now that no one from Envestio intends to reply to emails or social media messages.
- So far, one member of the group tried to locate Envestio’s old office without success.
- Another possible course of action is to physically locate the people themselves in order to ask for a response or notify the police of their location. People living in the region are welcome to use their connections to get more info.
- Do not do anything threatening or illegal. We are only seeking a response or a destination for authorities/lawyers.
Step 2 – Reporting to the authorities
- Please list and link to the relevant Latvian and Estonian authorities and departments.
- We should find the exact legal offence that we intend to report.
- We should decide between bombarding the authorities with reports or sending a combined report by many investors.
Step 3 – Legal action
- Anyone with legal knowledge or experience is welcome to share her or his thoughts on the right approach to others: What exactly are we suing Envestio Scam for, and how.
- If you are involved in the proceedings against Envestio, share insights and progress from that endeavour.
Also, make sure to join Telegram “EnvestioDiscussion” and FB group named “United Investors of Envestio“. There are a lot of investors out there, just like you and those are the 2 places, where they hang out. Posting news articles, information and even gathering information for a lawsuit againt Envestio.
As more information rises from the ashes, I will be making constant updates to this article.
I personally have 500€ invested into Envestio, so I have a “skin” in the game. Are you also one of them? How big was your portfolio at Envestio? Leave a comment in the comment section below and keep me and other investors up to date.