After a lot of thinking and research over the past few weeks and the holidays, as well as everything that happened since December with Kuetzal, I made a decision. I’m withdrawing my money from Envestio, Monethera and Wisefund.

I want to explain my thought process, what I found out during my research of the three P2P platforms, exactly how I’m going to proceed on each of them and how we got here in the first place.

You might still come to different conclusions in the end. Of course, a lot of this is based on my own opinion and risk tolerance. Nonetheless, you’ll find everything that made me reconsider in this post.

Updated (January 26th)! Please read my update #1 and #2 on Envestio, including my latest video!

I’m very grateful to all of you for all the kind words, encouragement on my blog and channel as well as your support. I never want to take that for granted.

My audience has grown a lot over the past few months, which I’m very grateful for. But that’s another reason why I feel it’s my responsibility to be honest with you about how I feel as soon as something changes.

That’s something that is very important to me and which I have tried to get deeper into, starting with me sharing my entire investment portfolio with you, which even included mistakes I made.

Envestio

Let’s start with Envestio. To make you better understand, we need to go back to 2018 first.

I opened my account on October 4th 2018, after reading reviews from other bloggers, some of which visited the platform as well as projects that they offered in person.

The projects seemed reasonable to me and most of them had smaller funding targets of 40.000-100.000€, apart from the occasional larger project.

Now that I felt that I had a confirmation that the projects there were real because of bloggers visits, the high interest rates, combined with the buyback guarantee by the platform seemed like a great opportunity to me.

As a result, in October 2018, I started small, with 500€ at first and slowly invested more, until I had invested a total of 3.920€.

Then, in June and October 2019, when the platform had a shortage of available loans, I withdrew 891€ to invest somewhere else.

Something started to feel a bit off to me

When I asked Envestio why there were very few loans available during that period, they mentioned it was because of the summer holidays, some contracts took much longer than planned and that they wanted to focus more on fewer, larger projects.

Who knows, maybe they were already in talks with the new owner and discussing terms for selling the company.

Anyway, Envestio did start offering much bigger loans with longer loan terms, which to me looked a bit more questionable than the ones they had before. Here are two examples:

• Briana 4 residential with a total of 2,6 million Euros funded
• Development of a large dolomite deposit for a total of 2 million Euros.

The latter one was given to Dreimanis SIA. According to the Latvian company register, the company isn’t active any more. What happened?

New management at Envestio

Then, on December 2nd last year, Envestio announced that it had been acquired by a strategic investor from Germany, Arkadi Ganzin. To this day, we still know almost nothing about the new owner, he has never communicated to investors on the platform.

They also appointed a new COO, Eduard Ritsmann. He seems to have worked on at least one questionable project in the past and investors weren’t too happy about the change.

And while people appreciated Mr. Ritsmann presenting himself on YouTube, it was a bit hard to watch, as he was just reading text off the screen the entire time. Not the best way to build confidence in my opinion.

Update: On January 16th, Envestio announced that Evgeniy Kukin will be returning to the COO position.

Loan amounts kept increasing

Getting back to the platform itself, I noticed the new loans getting even larger since the change in management. Here are two notable examples:

• Materials for the construction of roads and technical salt: 1,7 million Euros of funding so far, looking for 4 million in total.

• Global Data Solutions: 1,5 million Euros of funding so far, planning to raise up to 5 million € via Envestio in total. Let’s take a closer look at this one.

The Global Data Solutions loan…

TogetherData is supposedly specialized in “high-tech equipment, online services, mobile and web applications that make human life and work more comfortable and more efficient”. And yet, I find it strange they haven’t updated their website in a while. For example, it’s still showing the vice president in the About section, even though he left the company in April 2019, according to his Linkedin profile.

Talking about LinkedIn, in its company profile TogetherData still links to another domain, which seems to be offline. The Facebook page also links to that same inactive domain that’s not working and there doesn’t seem to have been any activity since May 2019.

Would anyone care to explain?

No delayed payments and defaults?

The interest and principal payments always arrived like clockwork on my account, without delays. No matter whether it was the weekend, a holiday or any other day.

I personally find it extremely unlikely that there were no defaults or delays in the background on this many high-risk projects.

Look, in an ideal scenario, maybe Envestio just covered them with the total returns from other projects and didn’t want investors to have to deal with that.

In a worst case scenario, they are just virtual numbers, don’t represent actual loan repayments by borrowers, are automatically added to an account and only turn into ‘real’ money when people ask for a withdrawal.

What about loan agreements?

Even though Envestio has been online for over two years now, there is still no way to see any loan agreements on the platform. That should be standard practice, even Monethera and Wisefund allow you to download every single loan agreement right away.

Apparently you only receive them upon request via e-mail, which seems strange to me.

I decided: I’m leaving Envestio

Here’s the thing. After what happened with Kuetzal, which was heavily promoted by other successful blogs in the P2P lending space even though there were MAJOR red flags from the beginning, I’m not blindly trusting what anyone else says right now. Unless I myself or a larger group of investors are able to verify projects or what’s really going on in the background.

And the only project that has been verified over the past few months was the Hostel project, which we already knew was real because it was previously being financed on Crowdestor.

After reading this, I hope you understand my reasoning to leave the platform.

Here is what I’m doing:

• On Wednesday, a couple of hours after I posted the video, I sold about two thirds of the active loans I had on Envestio and asked for a withdrawal. Luckily, the buyback fee is only 5% of the loan amount.
• I’m leaving the remaining 1/3 until the end of the month, when their loan term ends. I’ll be withdrawing that money shortly after as well.

Some people in the community seem to be more optimistic about Envestio – in the end, everyone should decide for themselves on how to proceed. At least now you hopefully understand what made me reconsider my investment and can make your own decision.

Important Update (January 22nd)

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.

Important Update #2 (January 25th & 26th) – Police Report!

I just sent a detailed report of my case to Estonian police & other relevant authorities, as many others in the community have already done over the past few days. I think you should do the same.

Since I’ve seen that a lot of people were struggling with some templates that were shared in a few groups, I created my own report template you can use and fill out.

Hopefully that will make things a bit easier and fulfill the necessary requirements – although I’m sure they will reply asking for more details if not. Check the second page for details on where to send it via e-mail.

• Estonian Police report template (.PDF)
• Estonian Police report template (.docx)

Update (Feb 3rd): Please use the official crime report template by the Estonian police to make sure. You can find it in their latest announcement here. After filling it out, signing it and attaching everything, send it to investment.fraud@politsei.ee. That e-mail has been set up specifically for anyone affected by Envestio.

Currently that’s the best course of action in my opinion, but I’m not an expert.

Meanwhile, Athos, a member of the community, has recently received a new response from ECN about the situation:

Dear Athos,

Thank you for your email. We are aware of both cases and have I informed all relevant authorities early on, as we also sate on our website https://eurocrowd.org/2020/01/22/ecn-reports-kuetzal-and-envestio-to-national-conduct-authority/

For now, the situation is difficult for investors. We are also aware of some discussions that happen, but given the large number of misinformation being shared, do not thing it wise to directly engage in any open forum. We are in touch however with one investor, who has also engaged a lawyer on behalf of investors, and seek to support where possible by speaking to authorities and industry.

To help you understand, as far as we know, what is going on. Both platforms are operating out of Estonia without the need for a license if the national conduct authority (NCA). As a result the NCA has not oversight or investigative powers. Neither has the Ministry of Finance. Both are, however, fully aware and are working on a solution. The Police would undertake a first assessment and then refer a criminal case to the General Prosecutor, if the circumstances suggest this as the right path. This has, to our knowledge, happened in the case of Kuetzal. In Envestio’s case this is likely imminent. However, this does not mean that the platforms operated a purposeful scam, it would initially only mean that they were in breach of the regulation that applies in their case and automatically leads to an investigation under criminal law.

From our contacts at the authority we understand that the process has started. We should expect to hear about major developments, but not otherwise.

This might be different for those that have launched civil lawsuits against the management, but I am not aware of such actions.

While for investors the situation must likely be disconcerting, there is nothing anybody can do to speed up the process (whereby none of the investors know anything about the investigation, mostly they seem to let off steam and, in the worst case, scare monger).

We used to have another case a few years ago, when Trustbuddy went into receivership after a change of management. While in that case the guilty parties, new management, were identified in the police investigation, the investments were largely lost (but this was a consumer loan and pay-day lender). As in these cases we have underlying business as borrowers the chances are better, as long as there was not false loan contracts.

ECN has largely focused on developing regulatory and policy approaches, which we have just successfully achieved with the proposal for EU wide harmonisation for business lending and equity (to be finalized and not in effect before 2021). We have had many discussions on transparency with platforms but not been able to achieve a coherent approach due to varying national requirements. We hope that with the forthcoming regulation and the support of European Institutions such as the EIB, EIF and EC we can make progress on this. But this is still a long way and it could also use the I put from investors.

O am sorry not being able to answer all your concerns, but I hope it helps a little.

“As long as there were no false loan contracts.” – This is the part I’m worried about, when it comes to how much money we’re able to recover.

That’s why I personally don’t think spending money on a lawsuit makes sense, which could take years and become very expensive, with no guarantee of success. I’d rather provide the police and relevant authorities with as much information as possible to catch the criminals involved, seize all their assets and distribute what they can gather back to investors.

Edit (January 26th): I changed my mind. I decided to join Guillermo’s lawsuit today. I have no idea if it will be successful, but I figured it couldn’t hurt to try and my individual contribution is small (23€). I shared all the details in my latest video here.

Please remember, I have no experience with anything like this and I’m also having a hard time figuring all of this out, so your opinion might be different.

Either way, here are a couple more links which I’m checking regularly at the moment or that may be of interest to you as well:

• EnvestioUpdates (Telegram)
• United Investors of Envestio (Facebook)
• The Fall of Envestio – Some technical evidence

Monethera

Alright, let’s talk about Monethera next.

I added Monethera in the middle of August 2019, around the time when no loans were available on Envestio. It seemed like a good alternative, offering similarly high interest rates and a buyback guarantee that made a bit more business sense to me.

At that time, their buyback guarantee stated that if a project was unable to pay back the principal at the end of the loan period, the company would return 35% of the funds to investors right away and the remaining 65% + interest would be returned after the funds were collected, for example either by selling collateral or in court.

That actually made more business sense to me than a 100% buyback guarantee on a loan with a 20% interest rate.

Since then, I deposited a total of 1.250€ on the platform. For more context, that’s around 3,7% of my 33.500€ P2P-Portfolio.

Most projects seemed interesting. I liked that Monethera provided each loan with more details on how they were planning to return the investment as well as interest back to investors.

And as I mentioned, it seemed like a good Envestio alternative which I wanted to experiment with, fully aware of the risks. Among other things, the fact that the platform was still young and that I hadn’t been able to meet the team in person yet.

Nonetheless, I was happy with the fast responses I always received by Monethera and enjoyed choosing the projects I wanted to invest in.

Loan agreements and 2FA

Unlike on Envestio, every loan came with its own contract/loan agreement, as it should be.

The platform was also one of the first (apart from Mintos) to offer two factor authentification, which gave me the impression that they cared more about cybersecurity.

Subjectively, I had no reason to complain

During my time on the platform, interest and principal payments arrived on time, usually on the 1st or 2nd of each month.

Some projects that I checked, like the Ossov mattress manufacture seemed real: An actual, active business selling mattresses with a working online shop and an active Facebook page.

Plus, two loans of mine were fully paid back already according to the platform.

What made me change my mind

However, now come the recent changes I didn’t like, which contributed to my decision to slowly withdraw the interest and principal payments I receive on Monethera.

On December 20th, Monethera changed the buyback guarantee for newly issued loans. It added a 95% buyback guarantee in case of default, by a company from Hong Kong called Richly Pacific International Ltd.

I don’t like buyback guarantees by third parties, as they make no business sense to me. What does a company from Hong Kong have to gain from a 95% buyback agreement on defaulted projects and why is a company from Hong Kong that interested in the Baltic region in the first place?

So that part seemed a bit strange to me.

The Cloud Computing Services loan

In addition, there was one loan that I didn’t invest in: Cloud Computing Services.

After a short Google search, I discovered it was a food manufacturing company planning to buy a webhosting company, which didn’t make much sense to me.

After being contacted several times, Monethera responded by publishing this article with more details on its blog. I still wasn’t convinced.

Nonetheless, I have to admit that their communication has been better than at Envestio.

I don’t know the full story

Look, it’s possible that Monethera will do a good job with its choice of loans and risk assessment going forward. I have no way of knowing exactly what’s going on behind the scenes and how the loans are really performing.

Monethera is still very young and has to prove itself, so it carries a lot of risk. While I communicated with them via e-mail several times, I haven’t met anyone in person yet.

I will update you on my impressions if I’m able to meet them in Riga later this year and hopefully see funded projects in person.

I decided to start withdrawing loan repayments

After what happened to Kuetzal, combined with the fact that my audience has been growing rapidly, I felt that it was my responsibility to do a clean cut of any platform I’m uncertain of one way or another.

Here is what I’m doing:

For Monethera, my strategy right now is to wait out the loan terms and to withdraw the money I receive back on a monthly basis. Luckily, the loan durations are relatively short.

Update

After the recent, shocking events with Envestio, I am considering asking for buyback on Monethera – as soon as it becomes available again. Either way, I will be withdrawing interest and principal payments on a monthly basis.

Wisefund

Last but not least, we have Wisefund.

I added Wisefund around the same time I added Monethera, back in August 2019. Over time, I deposited a total of 1.250€ here as well.

I knew the platform was very new, high risk and that it had to prove itself.

But, the team seemed decent, my communication with Ingus Linkevics was good and I liked that they also offered loans for German, Swiss and UK companies on their platform. All with interest rates of up to 20% per year and a buyback guarantee.

That was something I hadn’t seen on other platforms, so I was excited to test it out with some of my capital.

And as far as numbers go, I received interest and principal repayments perfectly on time here as well.

Alright, now that you know that, here is everything that happened since then that made me change my mind.

Why I changed my mind

It’s very hard to do any due diligence on the projects on the platform, since Wisefund shares very limited information and only uses stock photos, none of the actual projects.

Talking about projects, after looking into it, I did not like that the platform raised a total of 1,15 million Euros for fertiliser manufacturing, through two loans for a small company, KRM Service LTD, which is registered at a post-box in the UK.

The buyback guarantee and the early exit guarantee is by an unknown independent third party. What’s the point of hiding this third party? As I mentioned with Monethera, this part makes no sense to me and seems a bit shady.

If I remember correctly, it took Wisefund over a full month to change its bank. As a result, deposits didn’t work during that time, but there weren’t any projects anyway. 

Luckily withdrawals still worked. Their explanation for the issues was trouble with their payment provider and that they were working on faster payment processing as well as new deposit options.

Talking about loans: Wisefund recently published this statement on Twitter:

While that is good to know, that makes me wonder: Was something wrong with due diligence on the loans before?

Also, no lending company should ever make this promise, even on Twitter, which makes it seem like no risks are involved:

I decided to start withdrawing loan repayments

Good, now you know some of the things that led to my decision to start withdrawing the interest and principal I receive back from my Wisefund loans as well.

Here is what I’m doing:

Just like I’m doing with Monethera, I decided to wait out the loan terms and withdraw the money I receive back on a monthly basis.

Update

After everything that unfolded regarding Envestio over the past week, I decided to ask for buyback on Wisefund as well. While ‘instant’ buybacks are officially on hold because of a lack in liquidity, it seems as though early-exits are still possible, as long as you’re ok with waiting around 15 business days.

Ingus Linkevics reached out to me after the video

Understandably, the Wisefund CEO (Ingus Linkevics) wasn’t too happy about my video and announcement, as he noticed a sharp increase in buyback requests after I published it.

He sent me long response, which I included below.

Wisefund’s response

Dear Angelo,
Let me raise some concerns of your review of Wisefund.

– KRM Service raised 1,15M EUR, ok it’s high risk investment. Jorgen has met Mr.Zaicevs in person, and also if you want, we can organize a video call with him to discuss the project and potential in it. Basically, on the money from the project he’s creating manufacturing business with more than a large potential in high and continuing business flow, and even in the worst case scenario he can explain the process of going out of the business and what are the maximum losses that may appear.

Yes, we published low amount of information, but we always welcomed people to reach out for more information, and we’d give it to verified users (we don’t want to throw publicly available for unverified users information which might appear sensitive)

– Concern about Hong Kong company: you are misleading: Wisefund never hid the guarantee partner, and shared with some bloggers and also investors through support channel the Letter of Assurance issued by the guarantee partner for Wisefund investors. Request it to support channel, and you will see. Also, once the buyback is done, user account has legally binding assignment agreement where guarantee partner takes over the claim to the loan amount sold. Now think about it – why Hong Kong? Imagine European company offering guarantee of repayment for high risk investments – that would quickly draw attention and fall under insurance licence. Hong Kong partner allows access to larger funds and quick processing of the requests.

Also, this is part of marketing, at a cost of fees applied to guarantee partner we’re getting more security for investors and thus getting quicker growth. In future not all of the projects will have the guarantee there, we will not be able to offer that for every project. And at no point Wisefund is putting their own funds to guarantee buybacks – there’s just no budget for that. Would we hold millions in external financing, ok, we’d might’ve consider that, but this is just not reasonable – why not just invest those funds and earn the high interest ourselves. Don’t you agree?

– Bank account missing for deposits for some time: As you see, we’ve introduced better management method through the agent, separating risks of loan management, client funds management and portal operations. There are several parts in both companies shared by each other, but some parts are separated. Internally, we have KYC procedures, AML procedures, Borrower acceptance procedure (including legal and financial checks), data processing procedure, data safety procedure – a lot. This is Wisefund business – to create platform which works smoothly like an engine and allows borrower benefit in creating business on funds that are acquired from the crowd who in turn gets higher interests than bank deposits can offer.

You are misleading by saying Paysera opening is easy. Try to open account for Crowdfunding business with Paysera or any other payment service provider and/or bank. Revolut even doesn’t accept it through their terms, Transferwise abandoned it as well, banks do not understand the business (and believe me, I’ve talked to some of the big ones, with Private bankers). With Paysera we have special agreement (see attached snippet of agreement head – I won’t share the agreement with you though). It took a while to open it, and they asked many questions and checked all of the procedures we have – and initially confirmed. This tells a lot I believe,

– Due Diligence, we’re very sure of the process we have in place, and we’ll publish the procedure on website this week for everybody to see what we do with applications. Update: Here it is. I hope it will drive some understanding of it. Further on, we’ll complement the project descriptions with additional parts of risk assessment and possible scenarios etc, but the more detailed information still will have to be requested through the support channel and will be given to verified users only.

– We are still working with Nord Capital Markets (Jorgen met Arvids as well during his visit in December), but the reach of partners has increased as we require more advice from professionals abroad on local laws and practices, as well as we request due diligence from various sources, and do the final check internally, within the team. So we changed the description to show that we have more than one partner to do a proper job on the DD.

Angelo, please be aware, your statements are at times subjective, and some people might accrue in losses even withdrawing from loans that are closing within two months time, losing 15-20% of the principal. You are an influencer, people follow your suggestions and point of view. Please do your homework and analysis, and reach out for more information before posting any significant statements so that they are objective.

Best regards,
Ingus Linkevics
Wisefund CEO

I appreciate that he contacted me right away and sent me a detailed response to the points I mentioned.

While I agree that I could have reached out to Wisefund before publishing my video, my mind is made up and I saw it as my responsibility to share how I felt, as well as my reasons for leaving the platform with my audience right away.

Even after reading the lengthy email, I still have many of the same concerns.

Conclusion

This was a hard post to write. But, I did a lot of thinking and ultimately decided to trust my gut feeling, plus all the reasons I mentioned in the article & video and to remove these three platforms from my P2P portfolio.

I will move some of the money to Crowdestor over time, which offers similarly high interest rates (which of course also come with risks!), but more transparency and a buyback fund which actually makes sense and doesn’t put the platform itself at risk.

As for everyone reading this, it’s your own decision if you want to keep investing on Envestio, Monethera and Wisefund or not.

It’s possible that you end up making high returns on your investments there and that everything goes well for years. Personally, I decided it’s not worth the risk any more and I’d rather support more transparent platforms and put my money into projects I actually care about.

It was important for me to share my doubts with you right away. I didn’t do that with Kuetzal in the past, even though I never invested there myself. Yet, whenever I was asked I gave my honest opinion. Several people thanked me afterwards for preventing them from getting into that platform in the first place.

For me, doing a clean cut of all platforms with intransparent practices (one way or another) seemed like the best and only option. I’m far from perfect, but I care about everyone watching my videos and reading my content and see zero benefit from ignoring or being quiet when I see red flags on any P2P platform.

A message to other Bloggers

Lastly, there is one thing I need to get off my chest for any other blogger that reads this:

If a lot of people value your opinion or look up to you, I really hope you’ll have a clean conscience, you’ll be honest about the good and the bad (without biases) about any platform you promote and that your main incentive is helping your audience invest & grow their money long-term.

I haven’t seen a single blogger even apologize for heavily promoting Kuetzal, even though there were major red flags from the beginning. I still hope that chapter ends well for anyone that’s involved.

Before you take off, I would love to hear your honest reaction to all of this. What is your own strategy or perspective?

Why I’m Leaving Envestio, Monethera and Wisefund (Video)