TrustBuddy
The business, the turning points, and the decisions behind them.
01 / WHAT IT BUILT
What the company did
TrustBuddy AB was a Swedish peer-to-peer lending platform, the first listed P2P platform in Europe (on Nasdaq OMX First North). It let retail investors fund consumer loans, promising returns of up to 12%, and expanded with a UK version in 2014. Around £23 million was invested through the platform. In October 2015 the company filed for bankruptcy after new management uncovered serious misconduct: lenders' capital had been used without permission, leaving a 44 million SEK shortfall in client accounts. Outstanding loans were later sold off for about 25% of their value, and the platform itself was bought by Northmill in 2016.
02 / TrustBuddy FAILURE REASONS
Failure reasons
TrustBuddy collapsed because its own management misused client money. An investigation by the new management team in 2015 found the company had lent out lenders' capital in violation of their instructions — a 44 million SEK discrepancy between what was owed to lenders and the client accounts — and had issued loans without assigning them to any lender. The Swedish Financial Supervisory Authority revoked its permissions and ordered it to halt operations immediately. Bankruptcy followed on October 19, 2015, making TrustBuddy the first European P2P platform to go bust. Lenders recovered only a fraction of their money when the loan book was sold at a steep discount.
03 / EVENT HISTORY
Events in the structured record
- Expansion
TrustBuddy launches a UK version of its P2P lending platform, promising retail investors returns of up to 12%.
- Misconduct revealed
In October 2015 new management uncovers serious misconduct — lenders' funds used without permission, 44 million SEK shortfall; the Swedish FSA orders operations halted.
- Bankruptcy
TrustBuddy files for bankruptcy on October 19, 2015, the first P2P platform in Europe to go bankrupt.
- Aftermath
In 2016 Northmill purchases the TrustBuddy platform for under 10 million SEK; outstanding loans are sold off for about 25% of their value.
04 / CONTEMPORARY REBUILD ASSESSMENT
Difficulty of rebuilding this project today
Material for this section is being gathered and checked. It will appear here once ready.
Overall assessment: Not completed
05 / CAUSAL CHAIN
How the factors connect
- 01
In October 2015 TrustBuddy's new management uncovered serious misconduct — 44 million SEK of lenders' money used without permission — and the Swedish regulator ordered operations halted.
- 02
On October 19, 2015 TrustBuddy filed for bankruptcy; lenders recovered only about 25% when the loan book was sold off.