In the brave new world of the digital economy, strong brands and distinctive domains are hard currency. Therefore it is not a big surprise to see new market entrants pick an existing brand and launching their own product line under the well-known brand’s name and replacing just a few letters to create visual or phonetic confusion amongst potential clients. We all have heard of brand pairs like Adidas – Adibas, Nike – Nire, North Face – Mouth Face etc.
We were quite surprised when we received some emails and calls from our investors with a question “WTF is going on?” last week as their reaction to the overwhelmingly negative media coverage on the Latvian crowdfunding platform, which has been using a very similar domain name to Crowdestate. According to “Äripäev”, an Estonian weekly business newspaper “The noose is tightening around the neck of a scandalous crowdfunding platform, which is being suspected of the violation of anti-money laundering regulations”.
Luckily, Crowdestate has nothing to do with that piece of news.
We have just recently passed a major milestone in late June this year and have received a Payment Institution license from the Estonian Financial Supervisory Authority. To become qualified as a regulated Payment Institution, we completed a major review and upgrade of all our business processes, including the AML/KYC processes and procedures.
Facing the use of a similar brand and domain name is nothing new to us. About 4 years ago, after our “Cease and desist” requests were rejected, we were forced to sue a real estate crowdfunding startup, that launched themselves under the copyrighted Crowdestate brand and with the “crowdestate” domain name. Another peacefully resolved case concerned a Russian cryptocurrency startup, who published a white paper describing the implementation of Crowdestate coin linked to commercial real estate. And still, there is a UK-based real estate crowdfunding platform Crowdestates
Devil is in the details
The speed of communication and amount of information is forcing people to take shortcuts and it will need just a difference of few letters to confuse one brand or service provider with another. In most cases, such confusion will result in just a good laugh with no real consequences, some other impersonations (especially in the financial sector) could cause an actual monetary loss.
Therefore, when dealing with financial matters, pay attention to the details! When suspicious, take a look at the websites’ SSL certificate and its validity, and when receiving a suspicious email, pay attention to the sender’s and reply-to addresses as well as on actual hyperlinks under any clickable pictures, buttons, or links.