Dear Community Member,
For a while, we have aspired to ask your opinion on the characteristics of CAG token. Needless to say, in the financial industry we have to be very careful with any promises or communications as the regulation heavily dictates how and what can be done.
We have a clear goal, but before investing more time into receiving a full clearance from the authorities, we need your approval and feedback whether we should continue and pursue these ideas in the first place.
Last year, you and I along with thousands of other believers achieved something incredible together. We raised 17.5 million dollars in our ICO for an important vision – democratizing finance.
Since then, the Change team has been working day and night to honor our part of the promise – to build a new democratic financial system. A system where money moves freely, your assets are always safe, and anyone in the world can access the highest-performance financial services.
Our office in Tallinn is crowded with new and excited team members, including top-notch engineers from pioneering FinTech startup Transferwise, a former financial regulator, and other innovative minds from half a dozen countries. Our team is already 18 people strong and we’ve also engaged a top Estonian law firm.
During 2018 we have launched crypto purchase and conversion products, native apps for Android & iOS, rebranded the platform, prepared for payment institution licensing, and most importantly, we have worked on a new token structure that is crucial for the future of Change and we’re convinced also for the whole FinTech industry. More about this later.
I don’t have to tell you that it has also been a tough year. As you know, the resistance of the current financial system is still strong. The world-wide crackdown on crypto cards in February also resulted in killing ours. An especially difficult moment for us, losing many months of work in a day without any warnings. The sentiment around ICOs is at an all-time low and this does not reflect well on anyone involved. But we are doing our best to overcome these challenges and see them as opportunities to always be better than we were yesterday.
Now, back to the good news and the token structure. We believe we have figured out a way how to further involve you in the future direction and success of Change.
With over 5800 unique token sale contributors and many more acquiring the CAG token in the secondary market, it is important that we identify clear rights and duties of tokenholders, and clarify where the CAG token fits within the company’s vision.
Our goal is to tie the token to the company’s equity. This process will ultimately transform Change into a proper public company with tokenized shares that can be traded on securities exchanges across the globe. Furthermore, the CAG security token would align the incentives of Change and our tokenholders by giving everyone an equal upside in the case of Change reporting high earnings, is acquired, or files for a traditional IPO.
According to our thorough research, the process of converting the CAG token into a security token is expected to be lengthy (around two years) and is dependent on the development of the securities token landscape and the relevant standards. Meanwhile, for the benefit of the community, an interim token with equity-like properties could be issued, where investors would hold a tokenized loan contract of the Special Purpose Vehicle, which owns the equity of Change.
This equity-like token could allow the team to choose at the end of each financial year whether to reinvest our earnings in operations and R&D or to distribute them among tokenholders. The tokenholders could give guidance to the team by voting in relevant matters of the company, such as product direction, growth, and upgrades to the token structure.
As a first step, we are looking for your feedback, ideas, and support regarding the proposed vision. With your green light, we will pursue to obtain the relevant approvals from our regulator.
To be clear, this is our vision and the realization of this is subject to the approval of Estonian FSA. This does not constitute an offer to sell, a solicitation of an offer to buy, or a recommendation of any financial instrument.
After receiving your positive response, we will propose the detailed plan to our regulator. This will take approximately one month and then we could disclose the exact terms of exchanging CAG for the interim token. We don’t plan to raise any additional funds. It would be a swap of tokens with a 1:1 exchange rate. What we know for sure is that all tokenholders opting for the swap will have to go through our identity verification, i.e. KYC process.
So, with your and our regulator’s approval, the swap will be the first utility case for CAG as a payment method that was envisioned for our marketplace product.
We hope this sheds some light on our vision regarding the CAG token. During the past weeks, we have been in touch with members of the community as we work on this solution and hopefully, this thread will start a healthy discussion among tokenholders. In regard to any questions, we will publish a Q&A section which will be continuously updated.
Looking forward to your feedback!
Kristjan Kangro, CEO of Change
This communication does not constitute an offer to sell, a solicitation of an offer to buy, or a recommendation of any security and nothing in here should be construed as a recommendation to buy, sell, or hold any investment or security or to engage in any investment strategy or transaction. Interim equity-like token is not a security as defined by Estonian Securities Market Act, and it is not deemed to be public offering in any case.
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