1. What is CABS?
CABS is an ERC-20 token, created to fuel our crypto securtization platform. 1 CABS gives its owner the ability convert 1BTC equivalent into Global Crypto Notes.
2. Why is CABS "so expensive?”
Just because something is not sold for $1 does not mean its expensive. Yes, our token is sold for 0.6ETH. However this is relatively very cheap. As of end of November, the price in USD for one CABS, was equal to around 2-3% of the BTC price. In other words the securitzation premium was just 2-3% of the value of the underlying asset. Relatively, Bitcoin Investment Trust (Google Finance ticker GBTC) on the same date was trading at a 50% securtization premium, or 5,000 USD. So relative to comparable benchmarks this is very cheap.
3. What is a crypto securitization?
This is a new concept being pioneered by CyberTrust. The idea is to take crypto OFF the internet, put it into a Switzerland based ex-nuclear bunker, and via a Luxembourg based legal and tax structure, issue securities that give their owners rights to claim this crypto if they want to. The new financial security that is created solves many regulatory, compliance, accounting, tax and other issues.
4. Why is it needed?
Its needed mostly for institutional investors. A large crypto fund has hundreds of millions in crypto assets which it can not put on accounting books. These large investors have problems, booking crypto to their balance sheets, sending and receiving money via traditional bank accounts and so on. Additionally many fund managers have strict investment mandates, like the need for risk free clearing, tax impact clarity, and regulatory compliance. Securtization of crypto solves the above.
5. Who needs institutional investors anyway?
We need liquidity and we want the crypto market capitalization to go up. To do that we need more demand and liquidity, which is concentrated in the hands of institutional investors. We the crypto community may continue to disregard their needs and requirements, or we can remove existing barriers and let them participate. In the later case, the price of Bitcoin probably continues to rise to 100,000 USD. Without them, their will not be enough demand and if someone decides to liquidate a few billion dollars into cash, the entire market could go down as much as 80-90%, possibly in a single day.
6. Do you use blockchain technology?
Yes we do. On a high level our solution is to build a real bridge between traditional financial infrastructure (i.e Clearstream) with different blockchain assets. We are starting with Bitcoin, Ethereum and Bitcoin Cash, but will add all top 20 blockchain assets by the end of 2018. We also use Ethereum for front end client services, of opening accounts at CyberTrust, moving in crypto funds and initiating conversions. We do not have our own blockchain, but our goal is to build a bridge between crypto to traditional finance.
7. Is it a centralized or decentralized solution?
In our second phase, we plan to execute a decentralized investment banking protocol. Our first step is to open a gateway between crypto and real traditional infrastructure. As soon as this done we will put it on a decentralized protocol.
8. What technical and financial expertise does your team have?
On a technical side, CyberTrust founders created the C2CX crypto exchange, assisted with the creation of SkyCoin, built a number of IT business including ITR in China and the largest digital print on demand publisher in Russia with sales over 1.5 billion rubles. On the financial side, the founders of CyberTrust worked at KPMG in corporate finance, the Boston Consulting Group, as well as built an investment bank in Ukraine.
9. Why should I buy Bitcoin Global Note?
Many retail investors prefer to hold BTC on their Trezor and probably never have a need for Global Crypto Notes. Institutional investors are different. The Bitcoin Global Note could be the only way for them to legitimately hold BTC. Additionally some other investors may prefer to buy Bitcoin Global Notes as opposed to BTC because of three reasons: -Some people prefer to hold asses inside their private banks, working through a broker to buy or sell, and having a clear path for inheritance among other reasons. -Their is a price difference between Bitcoin Global Notes and Bitcoin. Bitcoin Global Notes are expected to trade at a 40-50% premium. -Global Crypto Notes are need to create new compliant and regulated financial products.
10. How will people be able to buy Bitcoin Global Note?
Unlike buying crypto, Global Crypto Notes will be able to purchase through any broker or your bank. This is important as such transactions will be within existing AML/KYC frameworks. Thus, such transactions will be completely regulatory compliant.
11. Would i be liable for taxes by holding Bitcoin Global Notes?
Our structure is based on the Luxembourg Securitzation Law of 2004, which allows us to have a “pass through” regime for tax purposes. These means that you only pay taxes at the level of ownership. At the Luxembourg level there is no tax impact.
12. Where will the private keys be stored?
We store all the private keys in a Swiss ex-military bunker, which is operated by Deltalis. This company guarantees physical safety. For technological safety we use XAPO. We are also negotiating with a number of other providers.
13. Why do not you use smart contract to distribute tokens?
The fact is that automatic distribution via smart contract has proven to be very problematic in terms of security, resulting in many losses over the past year resulting from buyers sending funds to spoofed addresses. In that light, we chose a more secure approach for both us and the token buyers.
14. I'm worrying if the private investors ( I mean those ones who bought tokens on the private rounds) dump the price after listing in exchange?
A valid concern. This is why we made sure that the bonuses available to the private investors were not significantly higher than those made available to the general public. If they wanted higher bonuses, they had to agree to accept frozen CABS instead of the immediately usable type. The frozen ones are locked up until March/April of next year. If their goal is to actually securitize their bitcoins or ethereum, then those tokens will probably never be traded.
15. Where your token will be traded?
At first, C2CX exchange. We also will be applying to the top 5 most liquid exchanges, but as this is still under negotiations and we can not disclose the process.