Crowd1 CEO Johan Stael Von Holstein confirmed significant payment delays to Swedish investors, with some facing waits of several months. The confession came after Trijo news, a Swedish publication, interviewed investor Mae-Za Enge and then approached Holstein directly for comment on the missing funds.
While recruitment commissions continue to be disbursed in Bitcoin, promised returns have not materialized for many. Holstein initially attributed these withdrawal issues to banking "problems with payments outside the SEPA area." The Single Euro Payments Area, or SEPA, is a unified system designed to harmonize cashless transactions across participating European countries, simplifying direct debits and credit transfers.
Trijo quickly pointed out that Sweden operates fully within the SEPA framework, making Holstein's initial explanation contradictory for Swedish investors. Holstein then revised his statement, claiming, "I misunderstood your question which I thought was general." He then stated that "half the company being eliminated in covid-19 for over a month" was causing the backlog in Sweden, but asserted they were catching up.
This presented investors with two distinct and inconsistent explanations for the payment delays: non-SEPA banking issues for those outside the zone, and COVID-19 related staff shortages for those within SEPA. Trijo further pressed Holstein, citing Enge's experience which suggested Crowd1's withdrawal problems predated the widespread impact of the COVID-19 pandemic. Holstein responded that he "couldn't answer that."
The consistent payment issues and the shifting explanations from Crowd1's leadership raise red flags for financial regulators. Norway initiated an investigation into Crowd1's operations in November 2019. Such widespread payment failures often precede formal regulatory actions in other jurisdictions.
Investors willing to accept payments in Bitcoin are likely attempting to recover what they can from their initial investments. This method of payment, often used in financially distressed schemes, provides less transparency and can complicate tracking funds.
Crowd1 has previously adapted its business model in the face of scrutiny. After its purported gambling partnerships were exposed last month, the scheme rebranded itself as an app-based Ponzi, shifting its promotional focus. Originally, Crowd1's investor recruitment concentrated heavily in South Africa and neighboring countries. Since then, the scheme has expanded its reach into other regions globally.
Swedish authorities have not yet confirmed whether they are investigating Crowd1's operations within the country.