"Digitalized Gold and Silver, should you TRUST it?"

Kinesis Money CEO Thomas Coughlin interviewed by Rob Kientz of GoldSilver Pros on trust and the Kinesis Money platform

What ever happened to “Don’t trust, verify?” The most imported and most touted benefit of blockchain technology is the ability to independently verify data without the need to trust intermediaries or other third parties. As detailed in this previous article, with Kinesis Money independent verification of key data simply isn’t possible.

Let’s examine some highlights from the interview.

06:30 “We didn't have any interest really in the crypto space really that was just you know fiat money 2.0 in our view nothing backing it…”

Interesting comment from the CEO of a company that accepts no less than ten different cryptocurrencies including Tether.

06:42 “…interested in the application of the technology of blockchain decentralized…”

Kinesis Money is an extremely centralized fork of Stellar.

13:15 “…currently what we built the system out to be is biannual audits… …that’s in place at the moment…”

This is a blatantly false claim, clearly the CEO of the company knows that Kinesis Money has not been providing biannual audits. Why won’t he own up to it?

13:27 “…we’ve decided to up the ante at least in a trial period to do it [audit] once every quarter…”

If Kinesis Money were actually doing biannual audits, ironically their next audit would be due on approximately the same date that this interview was published (December 23, 2022) since the previous audit was dated June 20, 2022. Is this announcement a sleight of hand to delay the December 2022 audit until March 2023 or later? Coughlin continues by strongly impling that future audits will verify all the bars including weights, testing and serial numbers. Such an audit would be drammatically different than the last audit which only examined a sample of the bars in each location except for Istanbul which was not audited at all despite holding more than 35% of the gold and more than 13% of the silver Kinesis Money claims to hold.

16:03 “…it just makes audit a nightmare because we have to audit all those locations at exactly the same time…”

Is this an acknowledgelment from the CEO that if the whole system is not simulatenously audited the same gold and silver could be shifted around and double counted? What happens if they skip a location that holds more than 35% of the gold and more than 13% of the silver as they did in June 2022?

18:50 “…we’ve got our blockchain system which aggregates it and disperses it out at the end of each month…” referring to shared fee revenue.

How can these transactions be independently verified on the Kinesis Money “blockchain system”? How does it work for $KVT token holders? $KAU and $KAG are issued on Kinesis’ Stellar fork but $KVT is an ERC-20 token on Ethereum mainnet.

21:25 “…there you can see the full sort of you know quantifiable data there…”

Referring to the Kinesis Money fee share Coughlin explains that you can see all the data on thedashboard of the Kinesis Money CEX. But what happened to all the “blockchain technology” previously mentioned? Why can’t this data be verified using the Kinesis Chain Explorer if this is “real blockchain” providing all the transparency to be expected from “blockchains”?

22:18 “…the yield was almost 7%…”

High yields just for holding a token sounds suspiciously similar to other blockchain projects that have failed spectacularly.

23:35 “…with volume comes transaction fees…”

That much is clear from the Kinesis Money website. What is less clear is how to audit that volume or how a circulating supply of only $27 million $KAU was able to generate more than $6 million in fees in April 2021.

At the 27:30 mark, it becomes clear that the despite Coughlin’s claims of “no interest” in the crypto space earlier in the interview, the Kinesis Exchange is actually just CEX no different than FTX, Binance or any number of other centralized cryptocurrency exchanges that take custody of users fiat and cryptocurrencies.

At 34:50 Coughlin claims that an “important country” in Latin America will soon begin using $KAU and $KAG as legal tender. This worked so well for El Salvador.

38:40 “…the Kinesis Cool Wallet S which is basically a cold storage device… …it allows you to store your digital assets in basically a cold wallet environment off exchange…”

What good is a hardware wallet for asset that’s issued on a centralized, unverfiable blockchain?

41:40 “…for anybody interested in Kinesis or interested in signing we do have an affiliate link down here in the description…”

In case it wasn’t clear from the lack of difficult questions posed, the interviewer is earning referral fees by referring viewers to Kinesis Money.