Central Bank issues warning on crowdfunding

The Central Bank has warned consumers that crowdfunding, including peer-to-peer lending, is currently not a regulated activity in Ireland.

Crowdfunding can be described as a way in which money can be raised from a large number of individuals or organisations, to fund a business, project or personal loan, and other needs through an online web-based platform.

As a result consumers of crowdfunding are not protected by the Deposit Guarantee Scheme or the Investor Compensation scheme.

Furthermore, complaints in relation to crowdfunding cannot be made to the Financial Services Ombudsman.

In a statement today, the Central Bank said it is “actively monitoring developments in this area” and will continue to work closely with other European authorities in this regard.