16,000 are allocated to Nordstreet. Euro fine from the Bank of Lithuania

Considering that the company recognized the identified violation and took measures to eliminate it so that it would not occur again in the future, the Bank of Lithuania awarded Nordstreet 16,000 EUR well.

During the inspection, projects published on the crowdfunding platform administered by the company were evaluated, the owners of which are not established in Lithuania or do not reside in our country.

First, the company, when publishing information to backers about specific projects on its managed crowdfunding platform, did not provide all mandatory information on the essential characteristics of the projects, the amounts that the holders of projects themselves allocate to projects and associated risks. with specific projects. For this violation, the Bank of Lithuania imposed an impact measure – a public announcement.

Second, Nordstreet has not prepared appropriate procedures for evaluating the reliability of project owners (for example, the rules governing the process for evaluating the reliability of project owners do not establish procedures for evaluating the reputation and solvency of project owners established outside Lithuania). or do not reside in Lithuania, nor does it provide information on the reputation of the project owner collected before reposting a new project from the same project owner) and before publishing projects on its managed crowdfunding platform, the company incorrectly assessed the credibility (reputation and solvency) of the project leaders, because it collected insufficient or incomplete information necessary to assess the credibility of the project leaders.

The company itself stated in a press release that it intends to pay the fine, emphasizing at the same time that all procedural defects found during the Central Bank inspection have already been corrected .

Specialists from the Department of Financial Services and Market Supervision of the Bank of Lithuania carried out an unscheduled inspection of Nordstreet in the fall of last year.

“We have been operating in the crowdfunding market for more than 5 years, we understand its dynamics and the rules of the game, but we must admit that we have not properly assessed the peculiarities of other countries’ market regulations, procedures bureaucratic and differences in corporate culture, there were therefore hasty decisions.

On the other hand, the Nordstreet team is well aware that when working in the financial market, risk control and assessment is a priority area, which is why we appreciate the comments and decisions of the regulator as a lesson and an impetus to improve ourselves and the functioning of the platform. model. We actively communicate with investors, look for external partners to recover losses, and we succeed. For example, we recently secured funds for a project in Spain. This is why we are trying to completely neutralize the consequences of the mistakes made,” said Tomas Kaziukevičius, Nordstreet’s lawyer.

After the inspection and feedback from the Bank of Lithuania, Nordstreet updated the rules for publishing project information on the platform, as well as the rules for assessing the reliability of project owners, established the procedures valuation of mortgaged real estate and separately assessed the risk of exchange rate fluctuations. The company also prepared a new algorithm for assessing the solvency of project owners, updated the procedures for assessing the reliability of individuals, improved the rules for storing information, documentation and implementation work of the “four eyes” principle.

Nordstreet also doubled the number of team members performing monitoring functions.

Source: The Delfi

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