The Ministry of Finance wants to empower the Financial Supervision Authority to start overseeing crowdfunding platforms in Estonia, as this is an increasingly popular area where scams are moving. Two examples in this case are Kuetzal & Envestio that were unveiled during the last few weeks, where people are likely to lose their money.
Kuetzal Private Limited Company is registered in the apartment of one apartment building on Mustamäe. There was no response to the “Actual Camera” attempt to find anyone at this address.
Through the Kuetzal’s crowdfunding platform investors were able invest in European business projects. Delfi’s Business Newsletter said the company has closed due to suspicious transactions and investors are likely to be long-nosed. Most of them are foreigners who have turned to the Estonian Ministry of Finance for answers.
Envestio, a crowdfunding platform from Estonia dissapeared and closed their website a few days ago. Potential scam has stolen more than 33M eur from investors.
“Unfortunately, the ministry is not an investigative body. We have forwarded this information to the Financial Supervision Authority, which in turn has forwarded it to the police, and the authorities should decide on the basis of this information to initiate proceedings,” said Thomas Auväärt, head of the financial markets policy department.
At the same time, there is currently no supervision of common funding platforms in Estonia. The Financial Supervision Authority drew the Ministry’s attention to this many years ago. Now things are moving.
“Now that the European Union has also agreed that this area should be regulated, it is likely that during next year regulation will be developed. /…/ This means that the Financial Supervision Authority will have the power to supervise platforms, which also means that the Financial Supervision Authority will ask apply for a license to provide such a service at all, “explained Auväärt.
Private investor Catherine Holm said investing in crowdfunding platforms should do some good background work.
“I wouldn’t say that all crowdfunding platforms are bad or lie or scam. Certainly those that are big, that work well, that give investors money. Just do the groundwork,” he said.
Saving credit unions, which are gaining popularity, are another topic. As far as the Ministry of Finance is aware, none of them is in trouble yet. However, for example, one of them - the Specialist - has been described in the media as a company with a suspicious background.
“In our opinion, this area also needs regulation and we are currently working on a corresponding draft,” Auväärt asserted.
Catherine Holm also has one thing to say about companies like Savings Loan Associations and Investors’ Union.
“Preliminary work and preparatory work. Personally, I can say that there is no investment in the Specialist or the Investors’ Union because the results of my preliminary work suggest that not everything is clear and transparent,” Holm said.