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UTRUST ICO Review And Token Analysis

Concerning lack of transparency and experience.

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The UTRUST ICO review is below this cautionary label. While we stand by our initial analysis of the payments market, the potential for cryptocurrency disruption, and the timing of a strong ICO in this area, we must update our ratings to reflect disturbing facts that we have discovered on deeper analysis, and in conversation with someone purporting to be Nuno Correia, the CEO of UTRUST, via Telegram.

Accordingly, we have reduced our ratings for TEAM, PROGRESS, and DISCRETION.


In a lengthy discussion with CEO Nuno Correia regarding the UTRUST ICO (self-identified on the UTRUSTOfficial Telegram account), and during subsequent research, our analysts uncovered the following information:

  • While Mr. Correia claims to have a background in law and marketing, he explained that in fact his legal expertise was exclusively obtained via college: “I studied law in Universidade do Minho and Universita di Genova (Italy)”
  • Mr. Correia explained that he owns three companies. Assuming that UTRUST is one of the three, he pointed out that the other two were BornAuthentic.com and Contraste Notavel. The website for BornAuthentic is a Shopify site that offers hoodies and jeans for sale; none of the items are in stock. We could find no trace of the second company.
  • Mr. Correia repeatedly attempted to steer our analyst to his Facebook page or a Skype call rather than discuss our review via Telegram. He would not share the Facebook page without first receiving our analyst’s profile. While this is not damning, it is baffling that the CEO of a company seeking to raise $49M in a crowdsale would explain that “You can’t just google [sic.] about me”.
  • The UTRUST website has a large and impressive-looking team. On closer inspection it turns out that almost every member of the team works at a web design and development business called Subvisual. Luis Ferreira is Head of Engineering at UTRUST and co-founder at Subvisual. Joao Ferreira is Head of Design at UTRUST and a web designer at Subvisual. Roberto Machado is CPO and Founder at UTRUST, and CEO and co-founder at Subvisual. In fact, every member of the team except the CEO and the CTO (Artur Goulao, who does appear to have a year of experience with payment systems) is listed on their LinkedIn profiles as working at Subvisual.
  • Subvisual’s website explains that their “favorite technologies” are Rails, Node.js, Angular.js and Meteor. There is no evidence of expertise in global payment systems. On LinkedIn, they list their competencies as “Web Development, Web Design, SaaS, Corporate Identity, and Collaboration”.
  • Subvisual could not be reached at their Cambridge, MA address via telephone. The address on their website for the office is CIC, the innovation center and coworking space.
  • The UTRUST whitepaper does not include an address or country of registration. Their marketing emails use the address of a coworking space in Zug, Switzerland.

We have significant reservations about UTRUST. The marketing is excellent. The ad buys are terrific. The token allocation seems remarkably (indeed, overly) generous.

We invite you to draw your own conclusions regarding whether a web design team can take on PayPal, and whether a CEO seeking to raise $49M should be generally untraceable (and evasive).

Our own interpretation is that this ICO is likely representative of the aspirations of a talented marketing team, rather than their actual experience in this arena. We wonder if that’s why they explain that VC funding is unnecessary (an unseasoned team rarely gets this level of investment) and if it explains the less-than-clear relationship between their web design firm and UTRUST.

Either way, the relative lack of blockchain and payments experience is hard for us to reconcile with any path to success.

As always, please do your own research.


UTRUST ICO Review Final Score and Report Card

The UTRUST ICO is one of the most heavily-hyped and marketed offerings we have seen in a while. That could be indicative of a strong drive for adoption post-ICO, or it could be illustrative of a cynical money-grab We intended to discover which, and as you will discover, we remain on the fence.

The team describes the UTRUST ICO as seeking “to raise enough capital to establish a de-facto payment platform in the cryptocurrency world,” and they pledge to burn tokens in the form of a buyback at market rate. In the UTRUST world, buyers receive services currently synonymous with credit cards – such as fraud protection, third-party mediation, and so on. Sellers receive the ability to accept crypto payments in fiat currency, low fees, and some seller protections.

We determine that for blockchain technology to truly take off, there will need to be many methods for merchants to integrate it. Existing examples include BitPay, Coinbase, Coinpayments.net, BitGo, and others. In UTRUST, we find another effort in this direction.

However, it seems that the UTRUST ICO has larger fish to fry – it is clear from their whitepaper that their true target is nothing less than to become the PayPal of cryptocurrency.

UTRUST ICO – The System

We understand that UTRUST intends to build a system which will offer full-service solutions to physical merchants wishing to accept various cryptocurrencies. The system allows an in-person customer to use cryptocurrencies such as Bitcoin, Ethereum, or Litecoin. The seller has the option of what to accept at the end of the day. They can choose to accept dollars, bitcoins, or just the native UTRUST token (generated through the UTRUST ICO token sale of one billion tokens).

 

UTRUST ICO Payment System

 

We find it surprising that in their whitepaper, the UTRUST team states that the project “could have been achieved by venture capital investment alone“.

Whenever this is possible or makes more sense, we discourage companies from using the ICO model as it will have a long-term negative effect on the investors to utilize technologies which are not appropriate to the cause. In the case of the UTRUST ICO team, they simply say:

“But we decided to go a step beyond, and wanted to offer the chance for anyone in the world to become a backer, leveraging the power of an Initial Coin Offering (ICO) and issue our own UTRUST token alongside the UTRUST Platform.”

CEO Nuno Correia said in an interview with Applancer.co:

“We are doing an ICO in order to leverage our platform development. This way, we can obtain the necessary initial support for MVP and marketing from the crowdsale instead of risking equity dilution like in more traditional venture routes.

We don’t understand the value of anyone in the world backing a merchant token. In order for this to make sense for the token holder, they must receive direct value in exchange for staking their funds in the system, and the token must be forcibly used within the system.

Luckily, as shown above, in the UTRUST system we do find that the token itself has an actual purpose. Moreover, it is significantly cheaper for a user to hold UTRUST tokens, because there are fees for exchanging in between when using normal tokens like Bitcoin to make payments.

Therefore, we can imagine that if enough members of a local business community were convinced to integrate the system, then they would benefit while the community would benefit through acquiring and holding a supply of UTRUST tokens to make small local purchases.

We again would like to stress that our overall take on this is that, if their claims are correct, then they should not need crowdfunding of any sort. They should simply be able to refine this idea, get funding from a private source, and then sell the tokens to the merchants who need them.

UTRUST ICO Interesting Features

Beyond this, the UTRUST system has some interesting features. First of all, an automated performance system which rewards good behavior on the part of the merchant, as well as an accountability system which continually enables customers to rate performance of the merchant. If a customer is unhappy, they are able to lodge a complaint, and the merchant is given an opportunity to mediate the situation.

This is superior to the gameable systems of Yelp and other review services which are occasionally used by competitors to denigrate a business’ reputation, because it requires proof of purchase by default. For local businesses, especially, we can see this being a useful way to gauge consumer feedback without having to speak to every single person who walks through the door (or to fear the phone as it rings for the 73rd time this week with someone trying to sell Yelp “services”.)

UTRUST aims to integrate as much of the legacy financial system into its network as it can, which is typically the best way to disrupt an aspect of the market. One improvement to the system might be actual merchant account integration, as PayPal and others have with major credit card companies. Even integrating with PayPal might be a good idea (if they were a/ not a threat or b/ had no desire to compete).

From a cryptonaught perspective, one thing we frown on is the idea that immediately cashing out cryptocurrency is absolutely the best idea for every merchant. Some merchants may prefer to hold their cryptos long-term and we would prefer systems which encourage this as much as possible. There are numerous fees involved with acquiring cryptocurrency, but when it is received as payment for a good or service, the fee is paid by the sender.

UTRUST attempts to solve all of the problems that existing platforms have, which is ambitious to say the least. In the following diagram they demonstrate this:

 

UTRUST ICO features and benefits

 

As you can see, this platform allows no chargebacks, just like any cryptocurrency; but it doesn’t release the funds until the user has confirmed receipt of the item.

UTRUST ICO Token Details

A total of 1 billion tokens are being issued, which we think is fair considering the way the system works. It will take many UTRUST tokens to buy a soda, for instance, but it could actually cost the merchant and user less in some cases.

UTRUST will only allow the tokens that are paid for to be generated.

UTRUST ran a pre-ICO already, but they are doing the full monty on November 2nd. The pre-sale and pre-ICO sold 150 million of these tokens at a maximum rate of 3 cents each. 70% of the total tokens are available during the ICO at a rate of 6.5 cents each, leaving 10% of all tokens for the team, diluted at 2% per year for the next 5 years, and 5% for bounties and marketing.

This seems remarkably generous given the current propensity for ICO founders to hold back 20-50% of tokens, vested almost immediately. With a max crowdsale cap of $49M it leaves less than $5M for the founders. We don’t feel qualified to speak to the reasoning for this, but it’s deeply unusual in the current market.

One thing we note is that the marketing for the UTRUST ICO has been heavy, professional, and well-executed. The team is sponsoring top positions on many ICO listing services, and has been advertising in the right places. This certainly speaks to a certain competency in an important area.

UTRUST ICO Team

The UTRUST name is not to be confused with the UTRUST employee benefit program for public schools based in Tennessee.

CEO Nuno Correia has a background in law and marketing, according to his stated biography. We were unable to verify any employment history through the normal use of LinkedIn. We find a tremendous red flag here – numerous searches for Nuno Correia returned no relevant results, and we are somewhat astounded that the crypto community at large hasn’t looked more closely at this. Even a Google image search left us with the impression that Nuno Correia either doesn’t look like his photo on the team bio, or he only exists within UTRUST.

In addition, when contacted via Telegram Mr. Correia refused to offer any details of his past history without one of our analysts sending him a Facebook profile first. This does not inspire trust. See below.

We invite the UTRUST team to supply background information on Mr. Correia so that we can update this ICO review, as this discrepancy serves only to fuel the opposite of what the company purports to stand for.

We note that he gave an Interview to Applancer, in which he said of his team:

“UTRUST is culmination of efforts from a highly experienced team. One of our main concerns when creating our team was that it should have seasoned members spanning from corporate management, finance, B2C startups, payments, blockchain development, law, finance, and more, UTRUST is confident it will deliver the payments platform of the future.”

The rest of the team are available through LinkedIn. One of them named Nick Olender lists his qualifications as “helping start-ups.”

Despite a substantial team of 16 people (many of whom seem accomplished), plus an array of advisors, we are simply unable to score the team highly without knowing more about their leader.

We also find statements about a team’s confidence to deliver a product often differ significantly from the reality of actually throwing the switch on that product. There are lessons to be learned from Mona.co

 

How UTRUST Makes Money

As evidenced above, we are appropriately suspicious of everyone in the cryptocurrency market. We note that UTRUST itself will receive a 1% fee from every transaction on the network (which may account for their seemingly-generous token allocation).

They will use this money to continue operations. The token holder will not receive any dividend based on the network’s activity, so the incentive to hold the token is based purely on demand for others to use it within the system – plus the token buyback scheme, which rests on a market price. If the market price is lower than the purchase price… well, you can do the math.

UTRUST ICO Disposition

We think that a billion tokens is a lot but ultimately mass adoption may require a lot of tokens. We are interested to see how fast merchants will actually adopt and use UTRUST.

This is a primary drawback to prospects which require an adoption of both merchants and users to work – or to any two-sided market in which adoption by one side is dependent on adoption by the other. In order for the token to retain a real value at market, users will need to be holding them with the expectation that they will be able to use them to later buy goods, and that will require commitments from both sides.

We think that a simple crypto-friendly alternative to Stripe or PayPal would be a better option than this. Simply take over the payment terminal as a whole. The ongoing resistance of the credit card issuers will eventually dissipate and a solution will come along that offers everything in one terminal. Merchants will have a much greater appreciation for something that enables them to accept any kind of payment and receive it in their local currency.

We would like to applaud them, however, for their commitment to market principles through only generating coins that are paid for with actual money.

We can’t help but note that the UTRUST ICO team changed the terms of their offering after the pre-sale, and then postponed the sale until October – then November. We also note that a successful 90-minute $1.5M pre-sale offers more in the way of good press than a real test of the ICO’s strengths. It’s also hard to ignore that a marketing email suggested that U.S. citizens and residents *may* be able to participate – this guarantees attention and traffic, without reciprocating with any promises. It is quite possible that all of these things are simply indicative of a genuine and wholehearted effort to secure compliance.

When considering the verdict on the UTRUST ICO, no matter how well the company scores in certain areas, we cannot overlook that their CEO is not traceable within 10 minutes. Perhaps if we researched for an hour or two we would find him and be impressed with his depth of marketing skill and lawyering technique – but should the average UTRUST ICO investor, conducting their due diligence, be required to do this before deciding?

Once again, we will happily revisit this review with input from the UTRUST ICO team regarding evidence of the CEO’s qualifications and achievements.

UTRUST ICO Review Scores
Summary
UTRUST has noble ambitions, some great marketing, a decent idea, and possibly one of the least greedy teams we've seen in the ICO world for a while. But they have no product, their CEO is anonymous, and they keep changing the rules. What's the deal?
Founding Team2.4
Product0
Token Utility1.5
Market9.6
Competition0.5
Timing9.5
Progress To Date1.7
Marketing & Hype9.6
Price & Token Distribution7.1
Analyst Discretion0
Upsides
A terrific market to own, if they can own it.
A terrific product to create, if they can create it.
Generous token distribution.
The team clearly has marketing expertise.
Downsides
Absolutely no getting around the fact that for $49M we deserve to know who the CEO is.
This market is unlikely to be cracked by a startup that readily admits they could have been funded by VC.
Market threats abound on every side of UTRUST. Hard to see how they can escape unscathed when PayPal, Visa, banks and regulatory authorities are likely to want their say.
UPDATED: Lack of transparency extends beyond the anonymity of the CEO, and we are troubled by his evasiveness.
2.2
You Can't Always Get What You Want

UTRUST ICO: The Facts

Project Name: UTRUST

Token Symbol: TBA?

Official website: https://www.utrust.io

Whitepaper: Available here

Whitelist date: Open

TGE Date: November 2nd, 2017

Hard Cap: $49M

Total Token Supply: 1 billion at 0.0065 USD

% of tokens distributed to Crowdsale: 70%

Exchange Rate: U.S Dollar

Token Distribution Date: TBA

Token Platform – ERC20 Ethereum

Group Channel on Telegram

Private Chat Instigated By Nuno Correia

About Our Methodology

The team at Crypto Briefing analyzes an ICO against ten criteria, as shown above.

These criteria are not, however, weighted evenly – our proprietary rating system attributes different degrees of importance to each of the criteria, based on our experience of how directly they can lead to the success of the ICO in question, and its token investors.

As always, please be careful when investing in Initial Coin Offerings (ICOs) as they can be highly speculative and offer few – if any – guarantees. It is sound practice to never invest more than you can afford to lose.

NOTHING in this website should be construed as financial advice or a solicitation of investment. We strongly recommend that you consult your financial advisor before investing, speculating or trading in any currency, digital currency, or security. Decisions based on information contained on this site are the sole responsibility of the user, and in exchange for using this site, you agree to hold Crypto Briefing and its affiliates harmless against any claims for damages arising from any decision you make based on such information. See full terms and conditions for more.

This category accounts for the leaders, developers, and advisors.

Poor quality, weak, or inexperienced leadership can doom a project from the outset. Advisors who serve only to pad their own resumes and who have ill-defined roles can be concerning. But great leadership, with relevant industry experience and contacts, can make the difference between a successful and profitable ICO, and a flub.

If you don’t have a team willing and able to build the thing, it won’t matter who is at the helm. Good talent is hard to find. Developer profiles should be scrutinized to ensure that they have a proven history of working in a field where they should be able to succeed.

What is the technology behind this ICO, what product are they creating, and is it new, innovative, different – and needed?

The IOTA project is a spectacular example of engineers run amok. The technology described or in use must be maintainable, achievable, and realistic, otherwise the risk of it never coming into existence is incredibly high.

Tokens which have no actual use case are probably the worst off, although speculation can still make them have some form of value.

The best tokens we review are the ones that have a forced use case – you must have this token to play in some game that you will probably desire to play in. The very best utility tokens are the ones which put the token holder in the position of supplying tokens to businesses who would be able to effectively make use of the platforms in question.

There doesn’t have to be a market in order for an ICO to score well in this category – but if it intends to create one, the argument has to be extremely compelling.

If there is an existing market, questions here involve whether it is ripe for disruption, whether the technology enables something better, cheaper, or faster (for example) than existing solutions, and whether the market is historically amenable to new ideas.

Most ideas have several implementations. If there are others in the same field, the analyst needs to ensure that the others don’t have obvious advantages over the company in question.

Moreover, this is the place where the analyst should identify any potential weaknesses in the company’s position moving forward. For instance, a fundamental weakness in the STORJ system is that the token is not required for purchasing storage.

With many ICO ideas, the timing may be too late or too early. It’s important for the analyst to consider how much demand there is for the product in question. While the IPO boom funded a lot of great ideas that eventually did come to fruition, a good analyst would recognize when an idea is too early, too late, or just right.

Some of the least compelling ICO propositions are those that claim their founders will achieve some far-off goal, sometime in the future, just so long as they have your cash with which to do it.

More interesting (usually) is the ICO that seeks to further some progress along the path to success, and which has a clearly-identified roadmap with achievable and reasonable milestones along the way. Founders who are already partially-invested in their products are generally more invested in their futures.

The ICO marketplace is becoming more crowded and more competitive. While in the past it was enough to merely announce an offering, today’s successful ICO’s work hard to build awareness and excitement around their offering.

Even for bad ideas, good marketing and hype can be a saving grace for the investor. We have to score based on the successful penetration of the investor circles as well as general presentation here.

Tokens with supplies which, if they reached $10, would subsume all the money in the world, are often ill-fated. This is mainly because there are not enough market participants to float higher prices on these tokens.

One day this won’t be the case at all, and you’ll have many people with large bags of many different things, actively trading and maintaining prices that couldn’t have made sense today. But today we have to take into serious account the total token supply, and although ICO founders usually aim too high, it can also be too low.

A supply that is low and also has a burn function, for instance, might spell a short life cycle for the product (a red flag to the investor, since the company can simply re-issue a new token later without owing you anything).

Our lead analyst has been reviewing Initial Coin Offerings since they arrived on the cryptocurrency scene. Together with our analyst specialists, he has built a weighted system that accounts for the technical aspects of each ICO we review – however, there is always room for the ‘gut feel’ of each idea, or for some novel or interesting use-case not discussed elsewhere.

The ‘Secret Sauce’ is a weighted blend of these factors, based on how we anticipate any given ICO might perform, and should be a strong indicator of how we might choose to make our personal financial decisions.

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