The Opportunity
As time has passed, more and more people have got involved in crypto mining. With increasing numbers of miners attempting to solve theproblems each day, it would follow that the hashes of blocks are being calculated at increasingly faster rates. To avoid things spinning out of control, the community agrees to increase the difficulty of the problem miners need to solve to ensure the consistency of the block generation.
Due to the complexity of the problems, it is now almostimpossible to mine profitably from home using standard computer equipment. However, there is still a great deal of profit to be made for those who can access the right equipment, suitably managed, cooled and administered. People looking to mine cryptocurrencies in the near future are likely to be much more successful if they have access to a centralised mining pool that is built to withstand this increasing complexity of the block solution.
The Solution
With AX1, we are offering token holders thechance to participate in a managed mining operation and enjoy capital appreciation via contractually guaranteed economic rights in the portfolio of mined coins. After deduction of any costs and liabilities incurred by the issuer, at least fifty percent of the value of the mined coins will be placed in a segregated account in order to assetback the AX1 Tokens. This represents a real, contractual, substantive and auditable value guarantee and is a key strength of this offer in addition to the other attributes of the AX1 Tokens discussed elsewhere. Under this arrangement, the Issuer will have NO further entitlement to withdraw, or otherwise use for any purpose of the issuer, ANY of the assets of this segregated account: its value therefore provides a solid basis for the perpetual assetbacking of the AX1 token and peace of mind to AX1 token holders that the Tokens are a true and verifiable store of value. The assets held in the segregated account, though off limits to the Issuer will not just languish, however, but continue to be advised upon by the Investment Advisory committee and therefore could be deployed in Proof of Stake activities and or by being traded as part of exchange operations to the increased value of the token holders. The segregated account will even be audited on a quarterly basis to provide yet more confidence to token holders with the results posted onto our online portal for review.
Jersey Regulatory Treatment of the Issuer
In order to give prospective ICO investors a degree of protection and comfort that may not be available in many other jurisdictions,and being mindful of the guiding principles pursuant to which the Jersey Financial Services Commission (the
“JFSC”) discharges its functions as the Island’s financial services regulator (the “Guiding Principles”) which are to have regard to:
• the reduction of the risk to the public of financial loss due to dishonesty, incompetence, malpractice or the financial unsoundness of financial service providers;
• the protection and enhancement of Jersey’s reputation and integrity in commercial and financial matters;
• the best economic interests of Jersey; and
• the need to counter financial crime both in Jersey and elsewhere,
The JFSC has required AX1 Limited (the “Issuer”) to obtain a consent from the JFSC under the Control of Borrowing (Jersey) Order 1958 for the issue of tokens pursuant to the ICO (a “COBO Consent”).
The COBO Consent imposes on the Issuer certain requirements which reflect the Guiding Principles, including to:
• appoint and maintain a Jersey resident director on the board of the Issuer;
• appoint a Jersey administrator licensed by the JFSC under the Financial Services (Jersey) Law 1998 to act as administrator to the Issuer;
• obtain the JFSC’s prior approval to any change either to the Issuer’s administrator or the Jersey resident director of the Issuer;
• prepare and file annual audited accounts with the Jersey Companies Registry;
• acknowledge that ICOs are a “sensitive activity” falling within the JFSC’s Sound Business Practice Policy.
Accordingly, the Issuer must maintain and adopt systems, controls, policies and procedures for the customer take-on, profiling and transaction monitoring at enhanced levels ensuring reporting of suspicions of money-laundering and financing of terrorism activity;
• prepare and submit to the JFSC for its approval an Information Memorandum which complies with certain content requirements required of a prospectus issued by a company under the Companies (Jersey) Law 1991; and
• include in any marketing material (including the Information Memorandum) certain prescribed consumer warnings.