As part of our ongoing transparency communication, we want to explain how Hive5’s marketplace model works, how it is structured, and how user wallet balances are treated. Clear and simple information helps investors better understand the platform before acquiring loan claim rights.
Over four years of operation, Hive5’s operating model has remained unchanged. The platform continues to operate as a marketplace for already issued loan claim rights. This update provides more detail on the current structure, our Croatian legal position, and our approach to long-term legal and regulatory planning.
This first update focuses on Croatia because Hive5 is established and operates there. Additional user-facing legal information for our main user jurisdictions is also being prepared and will be shared once finalised with legal advisors.
“Trust is built through clarity and consistency. Hive5 provides access to already issued loan claim rights; it does not act as a borrower, bank or payment institution. Our current legal assessment of the existing model has not changed. In parallel, we evaluate possible licensing or supervisory options as part of our long-term platform development.”
— Krisjanis Znotins, CEO of Hive Finance Group
A marketplace for already issued loan claim rights
Hive5 is often grouped with P2P lending platforms because users can acquire loan-related claim rights through the platform. However, its structure differs from the classic peer-to-peer lending model.
In a typical P2P lending model, a platform facilitates lending between investors and borrowers. Hive5, by contrast, neither issues loans to borrowers nor creates a direct lending relationship between users and borrowers. Instead, users acquire claim rights relating to loans that Loan Originators have already issued.
This means the borrower has already received financing before the loan appears on Hive5. The decision to issue the loan is made by the relevant Loan Originator, not by Hive5.
Hive5 is also not structured as a crowdfunding platform that raises funds directly for project owners or early-stage business ideas. For this reason, we describe Hive5 as a marketplace for already issued loan claim rights between Loan Originators and investors.
Current legal position in Croatia
Before launching Hive5 in Croatia in July 2022, we analysed the Croatian legal environment and the framework relevant to our planned model. Since then, we have continued working with legal advisors and reviewing developments relevant to our activities.
Based on our current legal assessment and the way Hive5’s model is structured, we do not consider Hive5’s activity to require authorisation as an ECSP crowdfunding service provider, MiFID-authorised firm, payment institution or e-money institution.
This is linked to what Hive5 actually does. Hive5 does not operate as a bank, payment institution or e-money institution. Hive5 does not issue electronic money, issue loans to borrowers, raise funding for project owners, or provide personal recommendations or discretionary portfolio management. Hive5 acts as an intermediary marketplace where users may acquire claim rights to already issued loan receivables.
A licence should correspond to the actual activity performed. Applying for a licence that does not match the current model would not, by itself, remove the risks related to acquiring loan claim rights. Loan claim rights remain exposed to credit risk, liquidity risk, economic conditions and loan originator performance.
Separately from the current legal assessment of the existing model, Hive5 is evaluating licensing and supervisory options as part of its long-term regulatory planning. This work should not be understood as an indication that the current structure requires such authorisation. It reflects the direction in which we want to develop the platform and provide more regulatory clarity over time.
At this stage, we cannot yet disclose the specific licence type, jurisdiction or timeline. Once we have a confirmed regulatory path and information that can be shared responsibly, we will update our investors.
Legal information beyond Croatia
This article starts with Croatia because it is Hive5’s operating jurisdiction. However, our legal work is not limited to Croatia.
We are preparing additional investor-facing legal information for our main user jurisdictions. These materials will explain Hive5’s marketplace model, including the claim-rights structure, payment flows, wallet-balance treatment, risk allocation, buyback mechanics and the difference between Hive5’s model and direct lending, deposit-taking, crowdfunding or payment-service models.
These materials should not be understood as individual legal advice, deposit protection, a capital guarantee or a formal determination by any regulator. Their purpose is to provide clearer information about the legal structure, risk allocation and limitations of Hive5’s marketplace model.
Investor funds and wallet balances
Wallet balances should not be understood as bank deposits. They represent user funds recorded in the user’s Hive5 account and not yet allocated to loan claim rights.
These funds are kept separate from Hive5’s operational funds in dedicated investor-funds accounts with our servicing financial institution.
We maintain accounting records and reconciliations between wallet balances shown on the platform and balances held in dedicated investor-funds accounts. This treatment has been included in our accounting and independent audit process since our first audited financial statements for the 2023 financial year.
At the same time, Hive5 is not a licensed payment institution or e-money institution. We do not present wallet balances as bank deposits, individual payment accounts, deposit-guaranteed funds or a formal trust/escrow arrangement, unless expressly stated in the applicable documentation.
The separation is an operational, accounting and risk-management segregation control, not a statutory payment-institution safeguarding scheme.
Final note
Hive5’s current model is a marketplace for already issued loan claim rights. The model has not changed, and our current legal assessment of the existing structure has not changed.
At the same time, we understand that investors want more clarity about legal structure, supervision and long-term regulatory planning. We will continue providing clear and responsible updates as additional legal information and regulatory planning steps are finalised.
Acquiring loan claim rights involves risk. Payments may be delayed, loan originators may face financial difficulties, economic conditions may change, and loan claim rights are not covered by deposit guarantee schemes or capital protection. Investors should carefully assess these risks and diversify their exposure.
