by Alex Lightman. February 5, 2018
Financial Industry Disruption: Vaultbank Plans to Revolutionize Banking as We Know It
What is your background? I spent a year-and-a-half as a consultant for Wells Fargo Bank working in the lending sector. Then I moved onto Prosper Marketplace where I spent two years running their data strategy. After that, I started a quantitative credit hedge fund. My experience working in traditional banking helped me to see many of its problems, primarily that fees are extraordinarily high and all of the that money is going to brokers. I realized that the blockchain could be used to scale a retail strategy, eliminating the need for middlemen. That’s when we started Vaultbank.
Tell me more about Vaultbank. Vaultbank is a cryptocurrency-based financial platform which is backed by our company’s assets and a portfolio of secured credit assets to provide potential stability and prospective income for investors.
We have the presale of our initial coin offering starting December 13th, where we will offer one of the first private security tokens. The tokens represent actual equity shares (non-voting) in Vaultbank’s future revenue-generating business ventures. These include an exchange, a debit Mastercard, and the Vaultbank Fund, which will be comprised of an asset backed credit portfolio. We intend to build token value and pay quarterly dividends to our token holders. The presale offers a 15 percent discount to early investors until we have raised $20 million.
Did you say you plan to pay quarterly dividends? Yes. We intend to pay quarterly dividends via Ethereum tokens, with maining yields being reinvested back into the underlying portfolio assets. We are one of the first companies to offer dividends.
The U.S. government has been cracking down on ICOs. How does that affect Vaultbank? Unlike most crypto and blockchain companies that issue utility tokens, Vaultbank has registered as a private security token. Most companies are just using the Howey Test, but I believe that’s a bogus test and I predict that 90 percent of those companies won’t be around a year from now.
We have four law firms in three countries and we’re doing everything to comply with the regulations in the U.S. and internationally. Our investment opportunity is only available to accredited investors per Reg D, Section 506(c) and Reg S, as an exempt offering. Also, potential investors will be asked for personally identifiable information upon creating an account on our exchange to participate in the sale. This information is to ensure compliance with various securities laws of the United States and foreign jurisdictions, as well as the Know Your Customer (KYC) and Anti-Money Laundering (AML) requirements.
What other products are you offering? Up until now, cryptocurrency has been very hard to use in the real world. Not many places take crypto to pay for goods or services. We have partnered with European-based Volopa to offer consumers a debit card to facilitate purchasing everyday items using cryptocurrencies at point-of-sale terminals around the world. Beyond offering crypto usability, the Vaultbank debit card will transact at highly competitive foreign exchange rates on 17 of the largest global currencies.
Additionally, we are developing the Vaultbank Exchange, a secure cryptocurrency and ICO investing and trading portal that plans to offer low transaction fees, reliable customer service and access to other private security tokens, including utility tokens.
How much money do you plan to raise in your ICO? We hope to raise $100 million, which will enable Vaultbank to obtain around a $900 million warehouse line of credit secured by our credit portfolio and providing for between 9:1 leverage of our ICO enterprise equity. That kind of leverage will result in our ability to build close to a $1 billion book of credit assets (including a portion of cash and reserves of liquid tokens), that we project could yield between 6.5-12 percent. With a portfolio size of $1 billion, we expect Vaultbank’s team to grow to between 30 and 40 employees.
What is the future of the financial industry and how will Vaultbank change that marketplace? One day I see a world where all financial products are on the blockchain. You’ll be able to use it to invest in mutual funds, for example, without the need for brokers or middlemen.
We plan to disrupt all banks and exchanges and create a world where trades happen for pennies.
I think you’ll be recognized as a pioneer in blockchain financial services and wish Vaultbank great success. I look forward to checking in on your company in the future.