Vaultbank brings together financial industry expertise, machine learning talent, and revolutionary blockchain technology

1. Vault​ ​Bank​ ​Whitepaper​ ​V.​ ​1.6​ ​REVISED​ ​DRAFT
Abstraction
Vaultbank​ ​brings​ ​together​ ​financial​ ​industry​ ​expertise,​ ​machine​ ​learning​ ​talent,​ ​and
revolutionary​ ​blockchain​ ​technology
Vaultbank.io​ ​is​ ​a​ ​cryptocurrency​ ​based​ ​bank​ ​and​ ​exchange​ ​with​ ​a​ ​trading​ ​terminal,​ ​debit
card​ ​capabilities,​ ​and​ ​offering​ ​tokens​ ​backed​ ​by​ ​secured​ ​credit​ ​assets​ ​with​ ​quarterly
Ethereum​ ​dividends.​ ​Vaultbank​ ​tokens​ ​enable​ ​industry​ ​leading​ ​foreign​ ​exchange​ ​rates
and​ ​asset​ ​management​ ​with​ ​a​ ​portfolio​ ​of​ ​lucrative​ ​secured​ ​credit​ ​assets,​ ​insured,​ ​and
robust​ ​returns​ ​translating​ ​into​ ​stability​ ​for​ ​investors.
Executive​ ​Summary
Vaultbank​ ​tokens​ ​stand​ ​to​ ​revolutionize​ ​banking​ ​with​ ​cryptocurrencies​ ​by​ ​tackling​ ​the
four​ ​essential​ ​hurdles​ ​of​ ​the​ ​securities​ ​distribution​ ​market;​ ​(i)​ ​Lack​ ​of​ ​ability​ ​to​ ​use​ ​a
security​ ​position​ ​as​ ​a​ ​fungible​ ​form​ ​of​ ​payment,​ ​(ii)​ ​Low​ ​liquidity​ ​and​ ​high​ ​transaction
costs,​ ​(iii)​ ​Uninsured​ ​portfolios​ ​(i.e.​ ​hedge​ ​funds)​ ​and​ ​(iv)​ ​Low​ ​yields​ ​from​ ​safe​ ​security
investments​ ​(i.e.​ ​Bonds)
Crypto​ ​Compatible​ ​Debit​ ​Accounts
Vaultbank​ ​through​ ​a​ ​series​ ​of​ ​strategic​ ​partnerships​ ​will​ ​provide​ ​debit​ ​cards​ ​that​ ​will​ ​be
accepted​ ​worldwide,​ ​and​ ​allow​ ​for​ ​you​ ​to​ ​pay​ ​with​ ​crypto​ ​through​ ​traditional​ ​plastic​ ​debit
cards.​ ​​ ​Account​ ​Holders​ ​will​ ​be​ ​empowered​ ​to​ ​select​ ​from​ ​multiple​ ​cryptocurrencies​ ​for
use​ ​as​ ​tender,​ ​and​ ​when​ ​they​ ​initiate​ ​a​ ​transaction​ ​(e.g.​ ​a​ ​dinner​ ​that​ ​costs​ ​$83.65),
either​ ​prepaid​ ​debit​ ​cash​ ​will​ ​be​ ​used​ ​or​ ​the​ ​holder​ ​can​ ​elect​ ​to​ ​use​ ​Ether,​ ​Bitcoin,​ ​or
Vaultbank​ ​tokens​ ​totaling​ ​that​ ​amount,​ ​which​ ​will​ ​then​ ​be​ ​sold​ ​at​ ​spot​ ​price​ ​to​ ​complete
the​ ​transaction.​ ​​ ​Because​ ​Vaultbank​ ​debit​ ​cards​ ​will​ ​be​ ​accepted​ ​at​ ​all​ ​point​ ​of​ ​sale
terminals​ ​–​ ​for​ ​the​ ​first​ ​time​ ​cryptocurrency​ ​will​ ​be​ ​able​ ​to​ ​be​ ​used​ ​as​ ​tender​ ​for
purchases.​ ​​ ​Furthermore,​ ​Vaultbank​ ​will​ ​also​ ​be​ ​providing​ ​transaction​ ​services​ ​for​ ​other
partner​ ​tokens​ ​-​ ​thus​ ​enabling​ ​other​ ​tokens​ ​to​ ​be​ ​used​ ​as​ ​tender.
Lowest​ ​Fees​ ​in​ ​the​ ​Market
Historically​ ​buying​ ​in​ ​and​ ​cashing​ ​out​ ​of​ ​cryptocurrencies​ ​was​ ​prohibitively​ ​expensive;
limiting​ ​much​ ​of​ ​the​ ​functionality​ ​of​ ​tokens​ ​to​ ​the​ ​domain​ ​of​ ​speculators.​ ​​ ​Because
Vaultbank​ ​will​ ​hold​ ​both​ ​cash​ ​and​ ​an​ ​array​ ​of​ ​cryptocurrencies​ ​at​ ​all​ ​times,​ ​it​ ​will​ ​be​ ​able

2. to​ ​facilitate​ ​seamless​ ​exchange​ ​of​ ​cash​ ​in​ ​cryptocurrency​ ​to​ ​facilitate​ ​transactions,​ ​and
will​ ​enable​ ​Vaultbank​ ​to​ ​compete​ ​with​ ​Coinbase​ ​on​ ​both​ ​service​ ​and​ ​fees.
Underlying​ ​Credit​ ​Portfolio​ ​to​ ​reduce​ ​Token​ ​Volatility
Vaultbank​ ​seeks​ ​to​ ​minimize​ ​the​ ​volatility​ ​of​ ​the​ ​token​ ​via​ ​producing​ ​a​ ​cryptocurrency
that​ ​is​ ​backed​ ​by​ ​secured​ ​credit​ ​assets​ ​-​ ​in​ ​turn,​ ​the​ ​yields​ ​of​ ​these​ ​credit​ ​assets​ ​will​ ​be
then​ ​reinvested​ ​back​ ​into​ ​the​ ​portfolio​ ​of​ ​credit​ ​assets​ ​to​ ​ensure​ ​a​ ​constantly​ ​increasing
underlying​ ​fundamental​ ​value​ ​to​ ​each​ ​token.​ ​​ ​Further,​ ​Vaultbank​ ​will​ ​maintain​ ​a​ ​liquidity
reserve​ ​to​ ​enable​ ​supporting​ ​the​ ​token​ ​price​ ​in​ ​times​ ​of​ ​market​ ​volatility.
The​ ​portfolio​ ​of​ ​credit​ ​assets​ ​will​ ​further​ ​be​ ​secured​ ​by​ ​a​ ​Surety​ ​Wrap​ ​to​ ​enhance​ ​foe
credit​ ​portfolio​ ​by​ ​CBL​ ​Insurance​ ​(an​ ​A-,​ ​publicly​ ​traded​ ​insurance​ ​company).
Vaultbank,​ ​in​ ​a​ ​strategic​ ​partnership​ ​with​ ​Random​ ​Forest​ ​Capital,​ ​which​ ​uses​ ​artificial
intelligence​ ​and​ ​machine​ ​learning,​ ​and​ ​various​ ​other​ ​off-line​ ​strategic​ ​partners​ ​will​ ​build
a​ ​portfolio​ ​of​ ​secured​ ​credit​ ​assets.​ ​​ ​Vaultbank​ ​intends​ ​to​ ​lever​ ​the​ ​portfolio​ ​with​ ​a
warehouse​ ​line​ ​of​ ​credit,​ ​secured​ ​by​ ​the​ ​portfolio​ ​of​ ​between​ ​4:1​ ​and​ ​10:1​ ​leverage,
depending​ ​on​ ​the​ ​class​ ​of​ ​assets.
Vaultbank​ ​is​ ​Launching​ ​into​ ​a​ ​Growing,​ ​Stable​ ​and​ ​Maturing​ ​Market
The​ ​cryptocurrency​ ​market​ ​has​ ​grown​ ​by​ ​1600%​ ​in​ ​the​ ​last​ ​12​ ​months.​ ​Financial​ ​giants
including​ ​J.P.​ ​Morgan​ ​and​ ​Central​ ​Banks​ ​alike​ ​have​ ​invested​ ​in​ ​blockchain.​ ​The​ ​main
street​ ​investor​ ​is​ ​likewise​ ​seeking​ ​more​ ​exposure​ ​to​ ​these​ ​markets​ ​(Bloomberg).​ ​Large
and​ ​small​ ​investors​ ​alike​ ​seek​ ​a​ ​more​ ​regulated​ ​market​ ​that​ ​allows​ ​for​ ​the​ ​safety​ ​nets
and​ ​insurance​ ​coverage​ ​offered​ ​in​ ​any​ ​registered​ ​security​ ​market.

3. Offering​ ​Summary
The​ ​Fund
The​ ​Vault​ ​Bank​ ​fund​ ​(the​ ​"Fund")​ ​is​ ​a​ ​Cayman​ ​partnership,​ ​wholly​ ​owned​ ​by​ ​VaultBank,
PLC​ ​(the​ ​Singapore​ ​PLC,​ ​which​ ​is​ ​issuing​ ​the​ ​tokens)​ ​and​ ​is​ ​designed​ ​for​ ​sophisticated
investors,​ ​and​ ​expects​ ​to​ ​commence​ ​investment​ ​operations​ ​in​ ​the​ ​fourth​ ​quarter​ ​of
2017.​ ​Participation​ ​in​ ​the​ ​Fund​ ​is​ ​conducted​ ​through​ ​the​ ​Vault​ ​Bank​ ​Token​ ​(the
“Token”).​ ​The​ ​token​ ​represents​ ​a​ ​non-voting​ ​share​ ​in​ ​the​ ​Singapore​ ​PLC,​ ​and​ ​provides
each​ ​Token​ ​holder​ ​an​ ​equitable​ ​interest​ ​in​ ​the​ ​underlying​ ​performance​ ​of​ ​the​ ​portfolio​ ​of
credit​ ​assets​ ​described​ ​in​ ​this​ ​document.​ ​The​ ​Fund​ ​will​ ​be​ ​managed​ ​by​ ​a​ ​General
Partner​ ​comprised​ ​of​ ​experienced​ ​senior​ ​credit​ ​officers​ ​and​ ​bankers​ ​as​ ​well​ ​as​ ​industry
leading​ ​technology​ ​engineers​ ​(the​ ​“General​ ​Partner”).
The​ ​Fund​ ​may​ ​enter​ ​into​ ​an​ ​arrangement​ ​with​ ​other​ ​investment​ ​funds​ ​managed​ ​by​ ​the
General​ ​Partner​ ​with​ ​the​ ​same​ ​or​ ​substantially​ ​similar​ ​investment​ ​objectives​ ​as​ ​the
Fund’s​ ​to​ ​either​ ​allow​ ​other​ ​funds​ ​to​ ​contribute​ ​their​ ​assets​ ​to​ ​the​ ​Fund​ ​to​ ​invest,​ ​or​ ​to
pursue​ ​its​ ​investment​ ​activities​ ​by​ ​investing​ ​all​ ​or​ ​a​ ​portion​ ​of​ ​its​ ​assets​ ​in​ ​a​ ​“Master
Fund”​ ​that​ ​will​ ​conduct​ ​the​ ​investment​ ​activities​ ​described​ ​in​ ​this​ ​White​ ​Paper.
Investment​ ​Objective​ ​and​ ​Strategy
The​ ​Fund’s​ ​investment​ ​objective​ ​is​ ​to​ ​provide​ ​attractive​ ​returns​ ​on​ ​invested​ ​capital
through​ ​a​ ​proprietary​ ​quantitative​ ​approach​ ​to​ ​underwriting​ ​credit​ ​assets.​ ​The​ ​Fund​ ​will
adhere​ ​to​ ​an​ ​investment​ ​strategy​ ​driven​ ​by​ ​data​ ​science,​ ​in​ ​which​ ​machine​ ​learning
within​ ​fully​ ​non-parametric​ ​statistical​ ​models​ ​are​ ​applied​ ​to​ ​the​ ​problem​ ​of​ ​expected
gains​ ​in​ ​financial​ ​investments.​ ​The​ ​General​ ​Partner​ ​seeks​ ​to​ ​identify​ ​“optimal”​ ​loans​ ​to
invest​ ​in​ ​and​ ​utilizes​ ​a​ ​multistage​ ​approach​ ​to​ ​purchase​ ​such​ ​loans.​ ​The​ ​Fund​ ​seeks
diversification​ ​of​ ​its​ ​assets​ ​through​ ​investments​ ​in​ ​loans​ ​of​ ​varying​ ​sizes​ ​and​ ​maturities,
based​ ​on​ ​the​ ​type​ ​of​ ​loan.​ ​The​ ​Net​ ​Income​ ​earned​ ​by​ ​the​ ​Fund​ ​during​ ​any​ ​given​ ​month
shall​ ​generally​ ​be​ ​retained​ ​for​ ​reinvestment.​ ​The​ ​Fund​ ​may​ ​use​ ​additional​ ​strategies​ ​to
achieve​ ​its​ ​investment​ ​objective,​ ​and​ ​also​ ​intends​ ​to​ ​employ​ ​leverage,​ ​as​ ​further
described​ ​below.​ ​​There​ ​can​ ​be​ ​no​ ​assurance​ ​that​ ​the​ ​Fund​ ​will​ ​achieve​ ​this​ ​objective​ ​or
that​ ​substantial​ ​losses​ ​will​ ​not​ ​be​ ​incurred.
The​ ​General​ ​Partner
Vault​ ​Bank,​ ​PLC,​ ​a​ ​Singapore​ ​company,​ ​is​ ​the​ ​general​ ​partner​ ​of​ ​the​ ​Fund​ ​(the
“General​ ​Partner”).​ ​The​ ​General​ ​Partner​ ​is​ ​responsible​ ​for​ ​the​ ​business​ ​and​ ​affairs​ ​of

4. the​ ​Fund​ ​and​ ​the​ ​management​ ​of​ ​the​ ​Fund’s​ ​portfolio.​ ​Austin​ ​D.​ ​Trombley,​ ​Stuart
Shelly,​ ​and​ ​Christopher​ ​Cummock​​ ​​are​ ​the​ ​founders​ ​and​ ​Managing​ ​Members​ ​of​ ​the
General​ ​Partner.
The​ ​Offering
The​ ​Vaultbank​ ​Security​ ​Token​ ​will​ ​be​ ​governed​ ​by​ ​the​ ​securities​ ​laws​ ​of​ ​both​ ​the​ ​US
and​ ​Singapore,​ ​where​ ​the​ ​Tokens​ ​are​ ​being​ ​offered​ ​in​ ​the​ ​Initial​ ​Coin​ ​Offering​ ​(“ICO”).
The​ ​Fund​ ​is​ ​offering​ ​Tokens​ ​to​ ​certain​ ​qualified​ ​investors​ ​as​ ​described​ ​herein​ ​and​ ​in​ ​the
Subscription​ ​Documents.​ ​Admission​ ​as​ ​a​ ​Token​ ​holder​ ​in​ ​the​ ​Fund​ ​is​ ​open​ ​to​ ​the
general​ ​public​ ​as​ ​applicable​ ​outside​ ​the​ ​US​ ​and​ ​solely​ ​to​ ​​accredited​ ​investors​ ​​within​ ​the
US.​ ​Moreover,​ ​in​ ​compliance​ ​with​ ​the​ ​securities​ ​laws​ ​of​ ​the​ ​US​ ​and​ ​Singapore,
investors/participants​ ​from​ ​countries​ ​that​ ​are​ ​on​ ​the​ ​“No​ ​Export”​ ​or​ ​Ban​ ​lists​ ​in​ ​multiple
jurisdictions​ ​and​ ​the​ ​are​ ​prohibited​ ​from​ ​inclusion.​ ​The​ ​list​ ​of​ ​Banned​ ​countries​ ​include
but​ ​may​ ​not​ ​be​ ​limited​ ​to:​ ​Cuba,​ ​Iran,​ ​Syria,​ ​the​ ​Sudan,​ ​North​ ​Korea,​ ​and​ ​the​ ​Crimea
region​ ​of​ ​the​ ​Ukraine.
Interests​ ​in​ ​the​ ​Fund​ ​are​ ​offered​ ​on​ ​a​ ​basis​ ​in​ ​reliance​ ​upon​ ​exemptions​ ​contained​ ​in
the​ ​Securities​ ​Act​ ​of​ ​1933,​ ​as​ ​amended​ ​(the​ ​"Securities​ ​Act")​ ​and​ ​the​ ​rules​ ​and
regulations​ ​promulgated​ ​thereunder​ ​for​ ​transactions​ ​involving​ ​public​ ​offering​ ​defined​ ​in
Rule​ ​501(c)​ ​of​ ​Regulation​ ​D​ ​promulgated​ ​under​ ​the​ ​Securities​ ​Act.​ ​Each​ ​Token​ ​holder
will​ ​be​ ​required​ ​to​ ​represent​ ​and​ ​warrant​ ​to​ ​the​ ​Fund​ ​in​ ​connection​ ​with​ ​its​ ​subscription,
among​ ​other​ ​things,​ ​that​ ​the​ ​Token​ ​holder​ ​is​ ​acquiring​ ​its​ ​Token​ ​Interest​ ​for​ ​its​ ​own
account​ ​for​ ​investment​ ​purposes​ ​only,​ ​and​ ​not​ ​with​ ​a​ ​view​ ​toward​ ​resale​ ​or​ ​other
distribution​ ​in​ ​whole​ ​or​ ​in​ ​part,​ ​that​ ​it​ ​will​ ​not​ ​transfer,​ ​sell​ ​or​ ​otherwise​ ​dispose​ ​of​ ​its
Interest​ ​in​ ​any​ ​manner​ ​that​ ​will​ ​violate​ ​the​ ​Securities​ ​Act​ ​or​ ​other​ ​applicable​ ​laws,​ ​rules
or​ ​regulations,​ ​and​ ​that​ ​it​ ​is​ ​an​ ​“accredited​ ​investor”​ ​as​ ​that​ ​term​ ​is​ ​defined​ ​in​ ​Rule
501(a)​ ​of​ ​Regulation​ ​D​ ​promulgated​ ​under​ ​the​ ​Securities​ ​Act,​ ​and​ ​a​ ​“qualified​ ​client”​ ​as
defined​ ​in​ ​Rule​ ​205-3​ ​under​ ​the​ ​Investment​ ​Advisers​ ​Act​ ​of​ ​1940,​ ​as​ ​amended.​ ​The
General​ ​Partner​ ​may,​ ​in​ ​its​ ​discretion,​ ​reject​ ​any​ ​Capital​ ​Contribution.
Offering​ ​Mechanism
The​ ​Fund​ ​will​ ​initiate​ ​an​ ​Initial​ ​Coin​ ​Offering​ ​(ICO).​ ​This​ ​mechanism​ ​entails​ ​a​ ​finite
number​ ​of​ ​tokens​ ​being​ ​sold​ ​over​ ​a​ ​defined​ ​period​ ​of​ ​time​ ​-​ ​The​ ​ICO​ ​Period​ ​-​ ​during
which​ ​all​ ​tokens​ ​will​ ​be​ ​sold.​ ​The​ ​Tokens​ ​represent​ ​a​ ​defined​ ​and​ ​immutable​ ​stake​ ​in
the​ ​Fund​ ​in​ ​the​ ​form​ ​of​ ​non-voting​ ​shares​ ​of​ ​equity.​ ​During​ ​the​ ​ICO​ ​Period,​ ​the​ ​Tokens
will​ ​be​ ​sold​ ​through​ ​the​ ​Orderbook​ ​platform,​ ​an​ ​online​ ​exchange​ ​headquartered​ ​in
Singapore​ ​and​ ​compliant​ ​with​ ​the​ ​securities​ ​laws​ ​of​ ​Singapore​ ​and​ ​the​ ​United​ ​States.

5. The​ ​Token​ ​is​ ​a​ ​security​ ​offered​ ​in​ ​reliance​ ​with​ ​public​ ​offering​ ​exemptions​ ​defined​ ​in​ ​the
Rule​ ​501(c)​ ​of​ ​Regulation​ ​D​ ​promulgated​ ​under​ ​the​ ​Securities​ ​Act.​ ​Orderbook​ ​thereby
bears​ ​the​ ​responsibility​ ​to​ ​record​ ​the​ ​identities​ ​of​ ​US​ ​persons​ ​seeking​ ​to​ ​invest​ ​in​ ​the
The​ ​Fund​ ​and​ ​gather​ ​reasonable​ ​proof​ ​of​ ​their​ ​status​ ​as​ ​an​ ​“accredited​ ​investor.”
The​ ​“accredited​ ​investor”​ ​definition​ ​is​ ​a​ ​central​ ​component​ ​of​ ​Regulation​ ​D.​ ​It​ ​is
“intended​ ​to​ ​encompass​ ​those​ ​persons​ ​whose​ ​financial​ ​sophistication​ ​and​ ​ability​ ​to
sustain​ ​the​ ​risk​ ​of​ ​loss​ ​of​ ​investment​ ​or​ ​ability​ ​to​ ​fend​ ​for​ ​themselves​ ​render​ ​the
protections​ ​of​ ​the​ ​Securities​ ​Act’s​ ​registration​ ​process​ ​unnecessary.”​ ​Qualifying​ ​as​ ​an
accredited​ ​investor​ ​is​ ​significant​ ​because​ ​accredited​ ​investors​ ​may,​ ​under​ ​Commission
rules,​ ​participate​ ​in​ ​investment​ ​opportunities​ ​that​ ​are​ ​generally​ ​not​ ​available​ ​to
non-accredited​ ​investors,​ ​such​ ​as​ ​investments​ ​in​ ​private​ ​companies​ ​and​ ​offerings​ ​by
hedge​ ​funds,​ ​private​ ​equity​ ​funds​ ​and​ ​venture​ ​capital​ ​funds.​ ​Under​ ​the​ ​accredited
investor​ ​definition,​ ​US​ ​persons​ ​are​ ​accredited​ ​investors​ ​if​ ​their​ ​income​ ​exceeds
$200,000​ ​in​ ​each​ ​of​ ​the​ ​two​ ​most​ ​recent​ ​years​ ​(or​ ​$300,000​ ​in​ ​joint​ ​income​ ​with​ ​a
person’s​ ​spouse)​ ​and​ ​they​ ​reasonably​ ​expect​ ​to​ ​reach​ ​the​ ​same​ ​income​ ​level​ ​in​ ​the
current​ ​year.​ ​US​ ​persons​ ​are​ ​also​ ​accredited​ ​investors​ ​if​ ​their​ ​net​ ​worth​ ​exceeds​ ​$1
million​ ​(individually​ ​or​ ​jointly​ ​with​ ​a​ ​spouse),​ ​excluding​ ​the​ ​value​ ​of​ ​their​ ​primary
residence.​ ​Certain​ ​enumerated​ ​entities​ ​with​ ​over​ ​$5​ ​million​ ​in​ ​assets​ ​qualify​ ​as
accredited​ ​investors,​ ​while​ ​others,​ ​including​ ​regulated​ ​entities​ ​such​ ​as​ ​banks​ ​and
registered​ ​investment​ ​companies,​ ​are​ ​not​ ​subject​ ​to​ ​the​ ​assets​ ​test.​ ​(SEC)
The​ ​ICO​ ​will​ ​be​ ​conducted​ ​through​ ​an​ ​online​ ​portal​ ​hosted​ ​by​ ​Orderbook.​ ​Once​ ​a
potential​ ​investor​ ​logs​ ​onto​ ​the​ ​Orderbook​ ​they​ ​are​ ​asked​ ​for​ ​their​ ​nationality​ ​and
domicile.​ ​If​ ​the​ ​person​ ​does​ ​not​ ​live​ ​in​ ​the​ ​US​ ​or​ ​is​ ​bound​ ​by​ ​US​ ​law​ ​it​ ​will​ ​not​ ​be
possible​ ​for​ ​them​ ​to​ ​make​ ​an​ ​investment​ ​without​ ​going​ ​through​ ​an​ ​accreditation
process.​ ​For​ ​an​ ​investor​ ​who​ ​is​ ​a​ ​US​ ​person,​ ​their​ ​accreditation​ ​will​ ​require
demonstration.​ ​For​ ​such​ ​investors​ ​intending​ ​to​ ​demonstrate​ ​their​ ​accreditation,​ ​the
name,​ ​address,​ ​date​ ​of​ ​birth,​ ​and​ ​other​ ​identifying​ ​information​ ​will​ ​be​ ​collected.
Furthermore,​ ​each​ ​potential​ ​investor​ ​will​ ​be​ ​required​ ​to​ ​provide​ ​a​ ​proof​ ​of​ ​income
satisfying​ ​the​ ​requirements​ ​for​ ​individual​ ​or​ ​household​ ​income​ ​over​ ​the​ ​two​ ​most​ ​recent
years,​ ​or​ ​a​ ​notarized​ ​document​ ​from​ ​a​ ​bank,​ ​financial​ ​representative,​ ​legal
representative,​ ​or​ ​other​ ​credible​ ​financial​ ​institution​ ​demonstrating​ ​a​ ​household​ ​net
worth​ ​exceeding​ ​$1​ ​million,​ ​net​ ​worth​ ​herein​ ​defined​ ​as​ ​excluding​ ​the​ ​value​ ​of​ ​a​ ​primary
residence.​ ​As​ ​part​ ​of​ ​this​ ​process,​ ​the​ ​investment​ ​will​ ​be​ ​frozen​ ​for​ ​a​ ​year​ ​and​ ​a​ ​day
(the​ ​“accreditation​ ​period”),​ ​and​ ​is​ ​subject​ ​to​ ​being​ ​revoked​ ​during​ ​that​ ​time.​ ​The​ ​data
collection​ ​process​ ​will​ ​be​ ​automated​ ​via​ ​a​ ​secure​ ​software​ ​platform,​ ​and​ ​stored​ ​in​ ​an
encrypted​ ​database​ ​compliant​ ​to​ ​applicable​ ​data​ ​privacy​ ​standards.

7. Risk​ ​Factors
The​ ​investment​ ​program​ ​of​ ​the​ ​Fund​ ​is​ ​speculative​ ​and​ ​entails​ ​substantial​ ​risks.​ ​There
can​ ​be​ ​no​ ​assurance​ ​that​ ​the​ ​investment​ ​objective​ ​of​ ​the​ ​Fund​ ​will​ ​be​ ​achieved​ ​and​ ​that
investors​ ​will​ ​not​ ​incur​ ​losses.
VaultBank​ ​may​ ​not​ ​be​ ​able​ ​to​ ​grow​ ​its​ ​portfolio​ ​of​ ​credit​ ​assets​ ​at​ ​the​ ​rate​ ​it​ ​desires,​ ​nor
may​ ​VaultBank​ ​be​ ​able​ ​to​ ​achieve​ ​the​ ​average​ ​yield​ ​on​ ​its’​ ​portfolio​ ​that​ ​it​ ​desires,
accordingly,​ ​there​ ​exist​ ​risk​ ​that​ ​VaultBank​ ​may​ ​not​ ​achieve​ ​its​ ​targeted​ ​results.
Further,​ ​VaultBank​ ​may​ ​not​ ​be​ ​able​ ​to​ ​achieve​ ​its’​ ​desired​ ​levels​ ​of​ ​leverage​ ​on​ ​its’
portfolio​ ​at​ ​the​ ​desired​ ​cost​ ​of​ ​debt.
VaultBank​ ​Token​ ​Security
VaultBanks’​ ​partnerships​ ​with​ ​insurance​ ​firms​ ​may​ ​be​ ​used​ ​to​ ​mitigate​ ​risk​ ​of​ ​total
capital​ ​loss​ ​as​ ​the​ ​Fund​ ​is​ ​intended​ ​to​ ​benefit​ ​from​ ​a​ ​surety​ ​bond.​ ​However,​ ​use​ ​of
these​ ​financial​ ​instruments​ ​do​ ​not​ ​constitute​ ​a​ ​guarantee​ ​against​ ​any​ ​and​ ​all
eventualities.VaultBank​ ​is​ ​unique​ ​in​ ​many​ ​ways.​ ​Firstly,​ ​we​ ​intend​ ​to​ ​provide​ ​Token
Holders​ ​with​ ​a​ ​recurring​ ​dividend​ ​which​ ​will​ ​be​ ​reviewed​ ​and​ ​announced​ ​by​ ​our
seasoned​ ​Board​ ​of​ ​Directors.​ ​Secondly,​ ​VaultBank​ ​will​ ​be​ ​investing​ ​proceeds​ ​from​ ​the
ICO​ ​in​ ​credit​ ​assets,​ ​thereby​ ​creating​ ​a​ ​stable,​ ​growing​ ​and​ ​cash​ ​flow​ ​yielding​ ​base​ ​for
the​ ​Token.​ ​Thirdly,​ ​VaultBank​ ​intends​ ​to​ ​use​ ​modest​ ​leverage​ ​to​ ​further​ ​enhance​ ​the
returns​ ​from​ ​its​ ​credit​ ​portfolio​ ​to​ ​facilitate​ ​ongoing​ ​and​ ​continued​ ​reinvestment​ ​to​ ​grow
the​ ​credit​ ​portfolio​ ​underpinning​ ​the​ ​Tokens.​ ​Fourthly,​ ​VaultBank​ ​will​ ​enhance​ ​its​ ​ability
to​ ​establish​ ​its’​ ​credit​ ​portfolio​ ​with​ ​leverage​ ​by​ ​providing​ ​its’​ ​warehouse​ ​lender​ ​(and​ ​in
the​ ​future​ ​its’​ ​depositors)​ ​a​ ​credit​ ​surety​ ​bond.​ ​Finally,​ ​VaultBank​ ​intends​ ​to​ ​maintain​ ​a
cash,​ ​securities​ ​and​ ​token​ ​reserve​ ​at​ ​all​ ​times​ ​to​ ​ensure​ ​liquidity​ ​for​ ​Token​ ​Holders.
The​ ​VaultBank​ ​approach​ ​to​ ​building​ ​a​ ​credit​ ​backed​ ​Token​ ​is​ ​similar​ ​to​ ​the​ ​asset
backed​ ​securities​ ​viewed​ ​today​ ​as​ ​some​ ​of​ ​the​ ​best​ ​quality​ ​and​ ​stable​ ​securities
investors​ ​can​ ​acquire,​ ​like​ ​Residential​ ​Mortgage​ ​Backed​ ​Securities​ ​(RMBS),​ ​or
Commercial​ ​Real​ ​Estate​ ​Mortgage​ ​Backed​ ​securities​ ​(CMBS).
In​ ​each​ ​case​ ​of​ ​RMBS​ ​and​ ​CMBS,​ ​the​ ​securities​ ​are​ ​typically​ ​tranched,​ ​into​ ​risk
categories,​ ​with​ ​each​ ​tranche​ ​being​ ​independently​ ​evaluated​ ​by​ ​rating​ ​agencies​ ​such​ ​as
S&P,​ ​Moody’s​ ​or​ ​Fitch.​ ​In​ ​the​ ​context​ ​of​ ​such​ ​securities​ ​a​ ​system​ ​of​ ​preferential
tranches​ ​is​ ​established​ ​such​ ​that​ ​investors​ ​are​ ​paid​ ​out​ ​in​ ​an​ ​established​ ​order​ ​often

8. according​ ​to​ ​the​ ​risk​ ​involved.​ ​Each​ ​tranche​ ​will​ ​have​ ​a​ ​coupon​ ​aligned​ ​with​ ​the​ ​risk
profile​ ​of​ ​such​ ​tranche.
Typically​ ​banks​ ​or​ ​other​ ​risk-averse​ ​institutions​ ​will​ ​opt​ ​for​ ​the​ ​lower​ ​yielding​ ​and​ ​safer
higher​ ​tiers​ ​tranches,​ ​such​ ​as​ ​BB​ ​-​ ​AAA.​ ​Average​ ​bank​ ​portfolio​ ​yields​ ​are​ ​between
4-7%.​ ​The​ ​higher​ ​risk​ ​segments​ ​of​ ​the​ ​tranched​ ​security​ ​will​ ​be​ ​typically​ ​sold​ ​to
institutional​ ​investors​ ​such​ ​as​ ​hedge​ ​funds​ ​whose​ ​model​ ​relies​ ​on​ ​maximizing​ ​the​ ​yield
of​ ​risky​ ​assets.​ ​Average​ ​Hedge​ ​Fund​ ​yields​ ​can​ ​be​ ​between​ ​12-20%.
VaultBank​ ​intends​ ​to​ ​lie​ ​between​ ​the​ ​risk​ ​profile​ ​of​ ​a​ ​typical​ ​bank​ ​and​ ​the​ ​risk​ ​profile​ ​of​ ​a
typical​ ​hedge​ ​fund,​ ​with​ ​a​ ​target​ ​portfolio​ ​yield​ ​of​ ​between​ ​8-11%​ ​on​ ​an​ ​un-levered
basis.
The​ ​VaultBank​ ​ICO​ ​enables​ ​qualified​ ​investors​ ​to​ ​purchase​ ​the​ ​equivalent​ ​of​ ​Limited
Partnership​ ​interests​ ​(in​ ​Singapore,​ ​known​ ​as​ ​a​ ​Private​ ​Limited​ ​Corporation,​ ​“PLC”)​ ​in
the​ ​enterprise,​ ​which​ ​owns​ ​the​ ​portfolio​ ​of​ ​loans​ ​and​ ​other​ ​credit​ ​assets,​ ​thereby​ ​giving
retail​ ​investors​ ​the​ ​ability​ ​to​ ​participate​ ​in​ ​a​ ​diverse​ ​credit​ ​portfolio,​ ​much​ ​like​ ​an
institutional​ ​investor​ ​or​ ​private​ ​hedge​ ​fund.
The​ ​Portfolio​ ​composition​ ​is​ ​designed​ ​by​ ​Vaultbank​ ​management,​ ​with​ ​oversight​ ​and
guidance​ ​from​ ​its​ ​seasoned​ ​board​ ​of​ ​directors,​ ​and​ ​further​ ​optimized​ ​by​ ​the​ ​industry
leading​ ​team​ ​of​ ​quants​ ​at​ ​Random​ ​Forest​ ​Capital.​ ​The​ ​current​ ​estimated​ ​performance
at​ ​Random​ ​Forest​ ​Capital​ ​is​ ​about​ ​12.5%,​ ​unlevered.​ ​Vaultbank​ ​intends​ ​to​ ​invest​ ​in​ ​a
diverse​ ​portfolio​ ​of​ ​credit​ ​instruments​ ​ranging​ ​from​ ​6%​ ​mortgages​ ​to​ ​20%​ ​factoring
contracts,​ ​with​ ​an​ ​average​ ​yield​ ​of​ ​between​ ​8%​ ​and​ ​11%.​ ​As​ ​Vaultbank​ ​will​ ​ultimately
benefit​ ​from​ ​leveraging​ ​its​ ​portfolio​ ​at​ ​a​ ​cost​ ​of​ ​about​ ​5%,​ ​Vaultbank​ ​expects​ ​its​ ​net
levered​ ​portfolio​ ​yield​ ​to​ ​be​ ​between​ ​15%​ ​and​ ​20%.
Unlike​ ​a​ ​traditional​ ​security​ ​however,​ ​the​ ​immutable​ ​ledger​ ​of​ ​the​ ​block​ ​chain​ ​is​ ​used​ ​as
a​ ​legal​ ​vehicle​ ​to​ ​obtain,​ ​store,​ ​and​ ​transact​ ​the​ ​investment​ ​or​ ​any​ ​portion​ ​of​ ​the
investment​ ​in​ ​the​ ​security.​ ​Vaultbank​ ​allows​ ​investors​ ​to​ ​participate​ ​in​ ​the​ ​income
generated​ ​by​ ​the​ ​portfolio​ ​of​ ​credit​ ​assets.​ ​The​ ​Token​ ​Holders​ ​will​ ​receive​ ​both​ ​regular
dividends​ ​as​ ​determined​ ​by​ ​our​ ​Board​ ​of​ ​Directors​ ​and​ ​benefit​ ​from​ ​reinvestment​ ​of
portfolio​ ​returns​ ​into​ ​growing​ ​the​ ​underlying​ ​portfolio​ ​of​ ​assets​ ​securing​ ​the​ ​VaultBank
Token.
While​ ​investment​ ​in​ ​equities​ ​provides​ ​for​ ​speculative​ ​upside​ ​for​ ​investors​ ​fixed​ ​income
investments​ ​typically​ ​do​ ​not,​ ​as​ ​they​ ​provide​ ​investors​ ​with​ ​a​ ​predictable​ ​yield.​ ​The

9. Vaultbank​ ​Security​ ​Token​ ​is​ ​intended​ ​to​ ​provide​ ​investors​ ​with​ ​both​ ​upside​ ​and​ ​a
predictable​ ​yield.
Fixed​ ​Income​ ​and​ ​Capital​ ​Markets
There​ ​are​ ​few​ ​safe​ ​harbors​ ​in​ ​the​ ​financial​ ​system.​ ​Asset​ ​categories​ ​such​ ​as​ ​highway
bonds,​ ​treasury​ ​bills,​ ​and​ ​ETFs​ ​resist​ ​all​ ​but​ ​cataclysmic​ ​collapses​ ​of​ ​the​ ​kind
experienced​ ​during​ ​the​ ​Great​ ​Depression.​ ​It​ ​is​ ​largely​ ​due​ ​to​ ​regulations​ ​that​ ​came​ ​out
of​ ​that​ ​period​ ​that​ ​we​ ​owe​ ​the​ ​fact​ ​this​ ​type​ ​of​ ​event​ ​has​ ​not​ ​occurred​ ​again.​ ​Rules​ ​for
security​ ​investment,​ ​corporate​ ​governance​ ​and​ ​reporting,​ ​and​ ​federally​ ​insured​ ​banking.
However,​ ​one​ ​of​ ​the​ ​side​ ​effects​ ​is​ ​that​ ​these​ ​assets​ ​are​ ​often​ ​comparatively​ ​low​ ​yield.
The​ ​bond​ ​market​ ​is​ ​one​ ​of​ ​the​ ​largest​ ​and​ ​most​ ​stable​ ​markets​ ​globally,​ ​particularly​ ​US
government​ ​debt​ ​securities,​ ​which​ ​total​ ​$38.1​ ​Trillion​ ​as​ ​of​ ​Q4​ ​2016.(BfIS)​ ​This​ ​market
primarily​ ​is​ ​composed​ ​of​ ​assets​ ​with​ ​very​ ​low​ ​liquidity,​ ​where​ ​terms​ ​are​ ​frequently​ ​over
a​ ​15​ ​to​ ​30​ ​years​ ​period.​ ​Yields​ ​are​ ​currently​ ​in​ ​the​ ​2%​ ​range.​ ​As​ ​investment​ ​vehicles,
they​ ​are​ ​primarily​ ​designed​ ​to​ ​offset​ ​inflation.​ ​​The​ ​advantages​ ​of​ ​such​ ​debt​ ​vehicles​ ​as
illustrated​ ​during​ ​the​ ​crisis​ ​of​ ​2008​ ​when​ ​they​ ​offered​ ​a​ ​rare​ ​source​ ​of​ ​stability.​ ​During
this​ ​time​ ​many​ ​of​ ​the​ ​portfolios​ ​of​ ​Wall​ ​Street​ ​were​ ​in​ ​a​ ​crunch​ ​due​ ​to​ ​a​ ​wide​ ​variety​ ​of
asset​ ​classes​ ​being​ ​significantly​ ​devalued​ ​simultaneously.​ ​For​ ​a​ ​high​ ​net​ ​worth
individual​ ​or​ ​institutional​ ​investor​ ​with​ ​low​ ​risk​ ​appetite​ ​seeking​ ​investment​ ​options,​ ​few
available​ ​options​ ​offer​ ​the​ ​safety​ ​of​ ​bonds,​ ​and​ ​no​ ​options​ ​at​ ​4%​ ​or​ ​above​ ​with
insurance​ ​on​ ​the​ ​yields.
For​ ​many​ ​investors,​ ​the​ ​primary​ ​problem​ ​with​ ​bonds​ ​is​ ​their​ ​liquidity​ ​limitations.
Financial​ ​markets​ ​dynamically​ ​and​ ​dramatically​ ​change​ ​through​ ​the​ ​passage​ ​of​ ​time,​ ​so
much​ ​so​ ​that​ ​a​ ​wise/sound​ ​investment​ ​in​ ​a​ ​bear​ ​market​ ​for​ ​instance​ ​may​ ​seem
relatively​ ​insufficiently​ ​lucrative​ ​in​ ​a​ ​bull​ ​market.While​ ​ETF​ ​Bonds​ ​might​ ​have​ ​shorter
terms​ ​comparatively,​ ​they​ ​are​ ​in​ ​general​ ​terms​ ​of​ ​a​ ​period​ ​of​ ​years​ ​and​ ​remain​ ​subject
to​ ​suffering​ ​the​ ​effects​ ​of​ ​macroeconomic​ ​downturns.​ ​It​ ​is​ ​a​ ​smaller​ ​market​ ​in
comparison,​ ​but​ ​still​ ​quite​ ​significant​ ​at​ ​$273B​ ​as​ ​of​ ​2015.​ ​The​ ​ETF​ ​Bond​ ​market​ ​grew
as​ ​a​ ​result​ ​of​ ​the​ ​2008​ ​crisis​ ​because​ ​it​ ​was​ ​viewed​ ​as​ ​a​ ​safe​ ​haven.(BlackRock)​ ​The
difference​ ​in​ ​yields​ ​between​ ​US​ ​Debt​ ​securities​ ​and​ ​ETF​ ​Bonds​ ​is​ ​not​ ​very​ ​significant,
as​ ​most​ ​ETF​ ​Bonds​ ​offer​ ​little​ ​over​ ​2%.​ ​They​ ​might​ ​have​ ​shorter​ ​terms​ ​but​ ​they​ ​are
generally​ ​over​ ​a​ ​period​ ​of​ ​years​ ​and​ ​remain​ ​liable​ ​to​ ​suffer​ ​from​ ​macroeconomic
downturns.
In​ ​the​ ​case​ ​of​ ​many​ ​securities​ ​a​ ​prior​ ​relationship​ ​of​ ​at​ ​least​ ​30​ ​days​ ​on​ ​the​ ​low​ ​end​ ​is
required​ ​before​ ​the​ ​investor​ ​can​ ​be​ ​made​ ​aware​ ​of​ ​the​ ​the​ ​potential​ ​investment.​ ​This

10. encourages​ ​long​ ​term​ ​relationships​ ​between​ ​brokerages​ ​and​ ​their​ ​clients.​ ​​ ​At​ ​times​ ​this
can​ ​prevent​ ​the​ ​awareness​ ​of​ ​certain​ ​investment​ ​bank​ ​created​ ​securities​ ​from​ ​reaching
the​ ​client​ ​of​ ​competing​ ​firm’s​ ​without​ ​the​ ​use​ ​of​ ​an​ ​intermediary​ ​institution​ ​that​ ​deals
with​ ​all​ ​the​ ​intuitions​ ​involved,​ ​resulting​ ​in​ ​increased​ ​fees​ ​associated​ ​for​ ​the​ ​investor.
Even​ ​then​ ​often​ ​the​ ​only​ ​opportunities​ ​the​ ​client​ ​may​ ​have​ ​acess​ ​to​ ​learn​ ​about​ ​are​ ​the
potential​ ​investments​ ​they​ ​can​ ​research​ ​in​ ​secondary​ ​sources​ ​or​ ​the​ ​ones​ ​they​ ​are
recommended​ ​from​ ​their​ ​individual​ ​brokerage​ ​firm.These​ ​restrictions​ ​are​ ​often
contributory​ ​to​ ​the​ ​inefficiencies​ ​of​ ​the​ ​system​ ​and​ ​can​ ​leave​ ​many​ ​busy​ ​investor​ ​at​ ​the
behest​ ​of​ ​their​ ​individual​ ​brokers​ ​to​ ​make​ ​them​ ​aware​ ​of​ ​potential​ ​investments.​ ​​ ​This​ ​in
part​ ​is​ ​caused​ ​by​ ​the​ ​limited​ ​channels​ ​many​ ​securities​ ​are​ ​allowed​ ​to​ ​be​ ​advertised​ ​to
potential​ ​investors.​ ​While​ ​in​ ​a​ ​pre-digital​ ​age​ ​when​ ​secondary​ ​sources​ ​were​ ​hard​ ​to
come​ ​by​ ​often​ ​due​ ​to​ ​their​ ​expense,​ ​these​ ​inefficiencies​ ​were​ ​less​ ​burdenful​ ​to​ ​the
system.​ ​Today​ ​the​ ​Internet​ ​allows​ ​for​ ​potential​ ​investors​ ​to​ ​access​ ​a​ ​myriad​ ​of​ ​avenues
to​ ​investigate​ ​potential​ ​investments(both​ ​registered​ ​with​ ​the​ ​SEC​ ​and​ ​not)​ ​and​ ​the
opportunity​ ​to​ ​become​ ​knowledgeable​ ​about​ ​the​ ​investment​ ​opportunities​ ​outside​ ​of
traditional​ ​channels.​ ​Generally​ ​the​ ​fee​ ​structure​ ​of​ ​traditional​ ​brokerages​ ​means​ ​being
charged​ ​at​ ​every​ ​step​ ​of​ ​the​ ​process,​ ​from​ ​inquiry,​ ​consultation,​ ​investment,​ ​buy​ ​in,
liquidation​ ​etc,​ ​in​ ​addition​ ​to​ ​the​ ​prospect​ ​of​ ​a​ ​monthly​ ​fee​ ​being​ ​assessed.​ ​This​ ​can
result​ ​in​ ​the​ ​diminishment​ ​of​ ​the​ ​liquidity​ ​of​ ​the​ ​investment​ ​overall(sometimes​ ​through
the​ ​adding​ ​of​ ​financial​ ​barriers​ ​at​ ​each​ ​step​ ​of​ ​the​ ​process)​ ​of​ ​certain​ ​kinds​ ​of
investment​ ​for​ ​certain​ ​kinds​ ​of​ ​investors​ ​on​ ​certain​ ​time​ ​scales.
Normally​ ​a​ ​financial​ ​institution​ ​in​ ​the​ ​case​ ​of​ ​an​ ​asset-backed​ ​security​ ​such​ ​as​ ​a
mortgage-backed​ ​security​ ​would​ ​be​ ​“securitized”​ ​or​ ​bundled​ ​so​ ​that​ ​investors​ ​can​ ​buy
them.​ ​In​ ​some​ ​cases​ ​the​ ​assets​ ​are​ ​bundled​ ​into​ ​what​ ​are​ ​called​ ​tranches​ ​which​ ​have​ ​a
weighted​ ​priority​ ​in​ ​the​ ​repayment​ ​system.​ ​While​ ​most​ ​of​ ​this​ ​securities​ ​are​ ​bundled​ ​by
federal​ ​organizations​ ​some​ ​are​ ​implemented​ ​by​ ​private​ ​banks​ ​and​ ​are​ ​called
“private-label.”​ ​Most​ ​of​ ​the​ ​federal​ ​organizations​ ​issue​ ​these​ ​initially​ ​on​ ​the​ ​most
common​ ​short​ ​term​ ​bills​ ​(3-6​ ​​ ​months)​ ​released​ ​weekly​ ​and​ ​the​ ​slightly​ ​less​ ​common
longer-term​ ​notes(1-10​ ​years)​ ​released​ ​monthly.​ ​They​ ​then​ ​can​ ​be​ ​bought​ ​and​ ​sold​ ​on
the​ ​secondary​ ​market​ ​although​ ​their​ ​functionality​ ​for​ ​fractionalization​ ​of​ ​the​ ​security
comes​ ​with​ ​added​ ​expense​ ​as​ ​it​ ​is​ ​often​ ​handled​ ​by​ ​a​ ​separate​ ​desk​ ​that​ ​keeps​ ​the
security​ ​and​ ​structures​ ​a​ ​payout​ ​that​ ​is​ ​equivalent​ ​to​ ​the​ ​fraction​ ​the​ ​investor​ ​desired​ ​to
liquidate.​ ​Leaving​ ​the​ ​secondary​ ​market​ ​primarily​ ​limited​ ​by​ ​caps​ ​as​ ​well​ ​as​ ​the​ ​size​ ​of
the​ ​bill​ ​or​ ​note.​ ​Who​ ​holds​ ​what​ ​is​ ​currently​ ​kept​ ​track​ ​off​ ​by​ ​a​ ​series​ ​of​ ​databases​ ​to
determine​ ​who​ ​owns​ ​the​ ​security​ ​in​ ​order​ ​to​ ​direct​ ​the​ ​payouts,​ ​the​ ​existence​ ​of​ ​the
secondary​ ​market​ ​makes​ ​this​ ​a​ ​difficult​ ​organizational​ ​task.​ ​In​ ​can​ ​serve​ ​to​ ​decrease
liquidity​ ​during​ ​the​ ​time​ ​delay​ ​between​ ​the​ ​investor​ ​wanting​ ​to​ ​liquidate​ ​and​ ​the

11. database​ ​processes​ ​required​ ​to​ ​conduct​ ​the​ ​trade.​ ​But​ ​before​ ​anything​ ​can​ ​happen,​ ​a
investor​ ​must​ ​become​ ​interested​ ​in​ ​the​ ​security.

12. The​ ​Vaultbank​ ​Credit​ ​Portfolio
The​ ​Vaultbank​ ​portfolio​ ​investment​ ​strategy​ ​is​ ​led​ ​by​ ​Stuart​ ​Shelly,​ ​Christopher
Cummock​ ​and​ ​Austin​ ​Trombley.​ ​The​ ​primary​ ​assets​ ​are​ ​credit​ ​assets​ ​purchased​ ​from
non-bank​ ​originators.​ ​The​ ​assets​ ​range​ ​from​ ​mortgages,​ ​second​ ​line​ ​mortgages,​ ​real
estate​ ​bridge​ ​loans,​ ​auto​ ​loans,​ ​equipment​ ​loans​ ​and​ ​leases,​ ​commercial​ ​mortgage
loans,​ ​asset​ ​based​ ​loans​ ​and​ ​factoring​ ​contracts.
The​ ​financial​ ​institutions​ ​originating​ ​and​ ​holding​ ​the​ ​credit​ ​assets​ ​VaultBank​ ​will
purchase,​ ​make​ ​them​ ​available​ ​to​ ​investors​ ​on​ ​a​ ​regular​ ​basis,​ ​either​ ​in​ ​pools,​ ​discrete
whole​ ​loans​ ​or​ ​participations​ ​in​ ​whole​ ​loans.​ ​The​ ​typical​ ​originator​ ​will​ ​continue​ ​to​ ​be​ ​the
primary​ ​servicer​ ​of​ ​the​ ​credit​ ​assets​ ​originated,​ ​charging​ ​the​ ​buyers​ ​of​ ​the​ ​credit​ ​assets
a​ ​nominal​ ​servicing​ ​fee​ ​for​ ​performing​ ​the​ ​billing​ ​and​ ​collecting​ ​function​ ​as​ ​well​ ​doing
any​ ​special​ ​servicing​ ​in​ ​the​ ​event​ ​of​ ​a​ ​default​ ​to​ ​ensure​ ​the​ ​loans​ ​are​ ​current​ ​and​ ​fully
repaid.​ ​This​ ​function​ ​is​ ​known​ ​as​ ​“Servicing​ ​Retained”.​ ​In​ ​addition​ ​to​ ​the​ ​servicing
function​ ​provided​ ​by​ ​the​ ​loan​ ​originators,​ ​VaultBank​ ​has​ ​engaged​ ​Portfolio​ ​Financial
Servicing​ ​Corporation​ ​(PFSC)​ ​to​ ​be​ ​a​ ​“back-up”​ ​servicer​ ​in​ ​the​ ​event​ ​one​ ​or​ ​more​ ​of​ ​the
originators​ ​fails​ ​to​ ​perform​ ​their​ ​duties​ ​in​ ​any​ ​way,​ ​thereby​ ​further​ ​ensuring​ ​the
continuation​ ​of​ ​cash​ ​collections​ ​and​ ​repayments​ ​of​ ​the​ ​credit​ ​assets.​ ​PFSC​ ​is​ ​one​ ​of​ ​the
most​ ​highly​ ​regarded​ ​institutional​ ​independent​ ​servicing​ ​platforms,​ ​providing​ ​servicing
for​ ​all​ ​major​ ​banks​ ​and​ ​a​ ​large​ ​number​ ​of​ ​securitizations.
Today,​ ​60%​ ​of​ ​U.S.​ ​mortgage​ ​credits​ ​are​ ​held​ ​by​ ​non-banks,​ ​up​ ​from​ ​30%​ ​in​ ​2013.
Over​ ​$4​ ​Trillion​ ​in​ ​US​ ​mortgages​ ​alone​ ​are​ ​available​ ​to​ ​select​ ​from​ ​hundreds​ ​of
non-bank​ ​credit​ ​platforms.​ ​Mr.​ ​Shelly,​ ​along​ ​with​ ​the​ ​Vaultbank​ ​board​ ​is​ ​tasked​ ​with
approving​ ​the​ ​solvency​ ​and​ ​risk​ ​associated​ ​with​ ​the​ ​platforms​ ​themselves​ ​and
identifying​ ​the​ ​credit​ ​profiles​ ​of​ ​originated​ ​assets,​ ​from​ ​regulatory​ ​compliance​ ​on
originations,​ ​volumes,​ ​collateral,​ ​duration​ ​and​ ​rate,​ ​to​ ​quality​ ​of​ ​management​ ​and
servicing.​ ​Mr.​ ​Trombley,​ ​along​ ​with​ ​the​ ​analytical​ ​team​ ​from​ ​Random​ ​Forest​ ​Capital,​ ​is
tasked​ ​with​ ​selecting​ ​the​ ​highest​ ​performing​ ​assets​ ​available​ ​within​ ​these​ ​platforms​ ​for
the​ ​Vault​ ​Bank​ ​portfolio,​ ​as​ ​well​ ​as​ ​purging​ ​the​ ​highest​ ​risk​ ​assets​ ​from​ ​the​ ​Vault​ ​Bank
portfolio.
Due​ ​to​ ​the​ ​number​ ​of​ ​credits​ ​available,​ ​VaultBank​ ​employs​ ​machine​ ​learning​ ​(ML)​ ​and
artificial​ ​intelligence​ ​(AI)​ ​rather​ ​than​ ​having​ ​humans​ ​look​ ​at​ ​each​ ​individual​ ​loan
marketplace.​ ​ML​ ​employs​ ​statistical​ ​algorithms​ ​over​ ​thousands​ ​of​ ​variables​ ​and​ ​millions
of​ ​observations​ ​that​ ​are​ ​capable​ ​of​ ​detecting​ ​persistent​ ​effects​ ​across​ ​all​ ​aspects​ ​of
data.​ ​The​ ​Vaultbank​ ​asset​ ​selection​ ​strategy​ ​is​ ​seeking​ ​the​ ​mathematical​ ​intersection​ ​of
risk​ ​mitigation​ ​and​ ​maximum​ ​yield​ ​for​ ​each​ ​loan​ ​selected​ ​for​ ​the​ ​portfolio.​ ​Vaultbank

13. utilizes​ ​a​ ​wide​ ​array​ ​of​ ​known​ ​and​ ​proven​ ​machine​ ​learning​ ​methods​ ​as​ ​well​ ​as
proprietary​ ​methods​ ​developed​ ​in​ ​house​ ​to​ ​optimize​ ​returns.
Random​ ​Forest​ ​Capital​ ​has​ ​access​ ​to​ ​data​ ​pools​ ​that​ ​allow​ ​it​ ​to​ ​create​ ​a​ ​more​ ​complete
profile​ ​of​ ​each​ ​credit​ ​thereby​ ​creating​ ​a​ ​more​ ​accurate​ ​risk​ ​assessment.​ ​Through​ ​the
Random​ ​Forest​ ​platform,​ ​Vaultbank​ ​is​ ​able​ ​to​ ​identify​ ​the​ ​lowest​ ​risk​ ​and​ ​highest​ ​yield
credits​ ​available​ ​on​ ​the​ ​vetted​ ​platforms.​ ​VaultBank,​ ​further​ ​has​ ​developed​ ​a​ ​unique
rigorous​ ​origination​ ​platform​ ​due​ ​diligence​ ​program,​ ​wherein​ ​VaultBank​ ​identifies​ ​the
best​ ​of​ ​breed​ ​origination​ ​engines​ ​from​ ​which​ ​it​ ​will​ ​buy​ ​loans.

14. The​ ​Vaultbank​ ​Card
The​ ​Vaultbank​ ​card​ ​is​ ​a​ ​physical/virtual​ ​prepaid/debit​ ​MasterCard​ ​and​ ​mobile​ ​app​ ​which
allows​ ​for​ ​the​ ​use​ ​of​ ​120​ ​Foreign​ ​Currencies​ ​from​ ​a​ ​single​ ​card.​ ​In​ ​the​ ​marketplace​ ​for
similar​ ​lifestyle​ ​cards,​ ​in​ ​addition​ ​to​ ​a​ ​per​ ​transaction​ ​fee​ ​most​ ​cards​ ​charge​ ​a
percentage​ ​of​ ​the​ ​market​ ​rate​ ​of​ ​the​ ​spread​ ​of​ ​the​ ​currency​ ​exchange.​ ​Customers​ ​who
travel​ ​to​ ​multiple​ ​countries​ ​with​ ​various​ ​forms​ ​of​ ​currency​ ​will​ ​inevitably​ ​run​ ​into​ ​the
“Cash​ ​Withdrawal​ ​Fee”​ ​and​ ​“Currency​ ​Transaction​ ​Fee.”​ ​These​ ​charges​ ​are​ ​often​ ​a
percentage​ ​of​ ​the​ ​transaction​ ​plus​ ​a​ ​flat​ ​fee,​ ​industry-leading​ ​fees​ ​are​ ​between​ ​2.75%​ ​-
2.99%,​ ​as​ ​seen​ ​in​ ​the​ ​table​ ​below.
Vaultbank​ ​can​ ​save​ ​customers​ ​up​ ​to​ ​seventy​ ​percent​ ​on​ ​these​ ​fees.​ ​Vaultbank​ ​for
example​ ​in​ ​GDP​ ​to​ ​EURO​ ​will​ ​charge​ ​a​ ​1%​ ​flat​ ​fee​ ​for​ ​“Non-Sterling​ ​Transaction​ ​Fees,”
this​ ​is​ ​equally​ ​valid​ ​for​ ​any​ ​currency​ ​pairing.​ ​​ ​Funds​ ​can​ ​be​ ​exchanged​ ​at​ ​point​ ​of​ ​sale
(industry​ ​average​ ​2.75%​ ​versus​ ​Vaultbank​ ​1%​ ​fee)​ ​or​ ​currencies​ ​can​ ​also​ ​be
exchanged​ ​via​ ​the​ ​app.​ ​Additionally,​ ​on​ ​ATM​ ​withdrawals,​ ​no​ ​fee​ ​is​ ​assessed​ ​versus
the​ ​industry​ ​average​ ​of​ ​1.5%.​ ​The​ ​VaultBank​ ​mobile​ ​app​ ​contains​ ​additional
functionality​ ​to​ ​transfer​ ​funds​ ​in​ ​any​ ​currency​ ​between​ ​merchants​ ​as​ ​well​ ​as​ ​friends​ ​and
family​ ​accounts​ ​resulting​ ​in​ ​a​ ​zero​ ​percent​ ​money​ ​transfer​ ​fee.​ ​Paypal​ ​offers​ ​similar
functionality​ ​for​ ​transfers​ ​in​ ​multiple​ ​currencies​ ​between​ ​accounts​ ​but​ ​charges​ ​a​ ​4.4%
fee​ ​for​ ​these​ ​transfers​ ​between​ ​accounts​ ​in​ ​various​ ​countries.​ ​Vaultbank​ ​will​ ​launch​ ​with
the​ ​ability​ ​to​ ​operate​ ​and​ ​exchange​ ​in​ ​120​ ​global​ ​currencies​ ​at​ ​the​ ​lowest​ ​rate​ ​on​ ​the

15. market​ ​for​ ​customers.​ ​​ ​In​ ​addition​ ​to​ ​these​ ​120​ ​traditional​ ​currencies​ ​all​ ​leading
cryptocurrencies​ ​will​ ​be​ ​supported​ ​for​ ​seamless​ ​transactions​ ​and​ ​exchanges​ ​and​ ​at​ ​the
same​ ​rate.
Vaultbank​ ​ensures​ ​its’​ ​processes​ ​and​ ​procedures​ ​exceed​ ​the​ ​regulatory​ ​obligations
applied​ ​by​ ​the​ ​FCA​ ​and​ ​HMRC​ ​and​ ​to​ ​ensure​ ​​our​​ ​high​ ​standards​ ​are​ ​maintained,
regular​ ​audit​ ​processes​ ​are​ ​in​ ​place.​ ​While​ ​the​ ​problem​ ​of​ ​payment​ ​card​ ​fraud​ ​losses
remain​ ​an​ ​industry​ ​wide​ ​problem​ ​Vaultbank​ ​employs​ ​the​ ​EMV​ ​standard​ ​​ ​i.e.​ ​the​ ​chip​ ​&
PIN​ ​solution.​ ​While​ ​the​ ​EMV​ ​standard​ ​is​ ​not​ ​a​ ​total​ ​solution​ ​as​ ​it​ ​does​ ​little​ ​to​ ​prevent
card​ ​data​ ​from​ ​being​ ​captured,​ ​stored​ ​and​ ​reproduced​ ​in​ ​“card​ ​not​ ​present”
environments​ ​(typically​ ​key​ ​in​ ​CVV​ ​code​ ​i.e.​ ​the​ ​3​ ​digits​ ​on​ ​the​ ​back).​ ​Contactless
Payments​ ​are​ ​now​ ​being​ ​employed​ ​to​ ​reinvent​ ​(and​ ​remove)​ ​the​ ​card​ ​number.​ ​In​ ​the
case​ ​of​ ​contactless​ ​payments​ ​a​ ​randomly​ ​generated​ ​value​ ​used​ ​to​ ​replace​ ​sensitive
information.​ ​This​ ​system​ ​​ ​protects​ ​card​ ​and​ ​account​ ​data​ ​by​ ​substituting​ ​the​ ​13​ ​to​ ​19
digit​ ​number​ ​on​ ​a​ ​payment​ ​card​ ​and​ ​encodes​ ​a​ ​unique​ ​sequence​ ​of​ ​numbers​ ​or
alphanumeric​ ​characters​ ​on​ ​its​ ​magnetic-strip.
As​ ​with​ ​other​ ​lifestyle​ ​cards​ ​in​ ​this​ ​product​ ​category​ ​certain​ ​perks​ ​and​ ​rewards​ ​are
associated​ ​with​ ​the​ ​Vaultbank​ ​Card.​ ​These​ ​perks​ ​include,​ ​but​ ​are​ ​not​ ​limited​ ​to,​ ​room
upgrades​ ​upon​ ​check​ ​in​ ​at​ ​2,000​ ​hotels​ ​globally,​ ​early/late​ ​check​ ​in​ ​at​ ​these​ ​hotels,
complimentary​ ​wifi,​ ​full​ ​breakfast,​ ​in​ ​addition​ ​to​ ​$100​ ​which​ ​can​ ​be​ ​used​ ​for​ ​hotel
services​ ​such​ ​as​ ​food​ ​&​ ​beverage​ ​or​ ​spa​ ​etc.​ ​At​ ​1,500+​ ​participating​ ​restaurants​ ​a​ ​50%
discount​ ​is​ ​offered​ ​when​ ​you​ ​use​ ​your​ ​Vaultbank​ ​card.​ ​Additional​ ​benefits​ ​include
access​ ​via​ ​the​ ​mobile​ ​app​ ​to​ ​F1​ ​Competitions​ ​/​ ​Events,​ ​Yacht​ ​Charter,​ ​Days​ ​out,​ ​Retail
stores,​ ​Theatre​ ​and​ ​concert​ ​tickets,​ ​and​ ​other​ ​exclusive​ ​competitions.
The​ ​Vaultbank​ ​card​ ​is​ ​an​ ​Alliance​ ​Partner​ ​with​ ​Concur​ ​for​ ​expense​ ​management.​ ​This
allows​ ​integration​ ​from​ ​a​ ​mobile​ ​app​ ​to​ ​facilitate​ ​management​ ​of​ ​travel​ ​itineraries​ ​and
links​ ​to​ ​many​ ​travel​ ​partners​ ​for​ ​e-receipt​ ​management.​ ​Managers​ ​will​ ​have​ ​access​ ​to
reports​ ​to​ ​be​ ​able​ ​to​ ​track​ ​what​ ​is​ ​being​ ​spent​ ​on​ ​travel​ ​within​ ​the​ ​business.​ ​In​ ​addition
managers​ ​can​ ​approve​ ​and​ ​manage​ ​these​ ​travel​ ​requests.​ ​By​ ​partnering​ ​with​ ​Concur
managers​ ​will​ ​also​ ​have​ ​access​ ​to​ ​database​ ​of​ ​negotiated​ ​and​ ​published​ ​prices,​ ​direct
connects​ ​and​ ​web-only​ ​prices​ ​on​ ​travel​ ​from​ ​a​ ​series​ ​of​ ​multiple​ ​global​ ​distribution
systems.
In​ ​summation,​ ​the​ ​Vault​ ​Bank​ ​card​ ​will​ ​provide​ ​liquidity,​ ​in​ ​any​ ​of​ ​17​ ​global​ ​currencies
as​ ​well​ ​as​ ​cryptocurrencies,​ ​to​ ​all​ ​investors.​ ​This​ ​will​ ​provide​ ​a​ ​level​ ​of​ ​convenience
comparable​ ​to​ ​a​ ​Debit​ ​Account​ ​without​ ​any​ ​maintenance​ ​fees.​ ​While​ ​this​ ​account

16. represents​ ​a​ ​stake​ ​in​ ​a​ ​security​ ​with​ ​a​ ​yield​ ​comparable​ ​to​ ​a​ ​hedge​ ​fund,​ ​the​ ​user
experience​ ​through​ ​the​ ​app​ ​and​ ​card​ ​will​ ​be​ ​that​ ​of​ ​a​ ​retail​ ​banking​ ​customer.
Blockchain​ ​Background
The​ ​cryptocurrency​ ​market​ ​developed​ ​out​ ​of​ ​a​ ​perceived​ ​need​ ​for​ ​decentralized​ ​finance.
The​ ​crisis​ ​of​ ​2008​ ​resulting​ ​in​ ​a​ ​deeply​ ​felt​ ​and​ ​widespread​ ​loss​ ​of​ ​faith​ ​in​ ​the​ ​financial
establishment.​ ​With​ ​the​ ​fall​ ​of​ ​Lehman​ ​Brothers​ ​and​ ​Bear​ ​Sterns​ ​it​ ​became​ ​known​ ​that
even​ ​the​ ​largest​ ​players​ ​in​ ​the​ ​insurance​ ​industries​ ​are​ ​susceptible​ ​to​ ​suffering​ ​the
consequences​ ​of​ ​over​ ​investment​ ​and​ ​unsound​ ​portfolio​ ​management​ ​practices.​ ​The
decentralized​ ​and​ ​thereby​ ​trust-agnostic​ ​nature​ ​of​ ​cryptocurrency​ ​gave​ ​people
worldwide​ ​the​ ​tools​ ​to​ ​hold​ ​and​ ​transact​ ​unique​ ​digital​ ​goods​ ​and​ ​their​ ​associated​ ​value
without​ ​any​ ​centralized​ ​intermediary.
Cryptocurrency​ ​was​ ​designed​ ​as​ ​method​ ​for​ ​decentralized​ ​transactions​ ​with​ ​value​ ​held
in​ ​scarce​ ​digital​ ​goods.​ ​It​ ​appeals​ ​most​ ​strongly​ ​in​ ​societies​ ​where​ ​their​ ​own
governments​ ​have​ ​made​ ​currency​ ​worthless​ ​through​ ​hyperinflation.​ ​Today​ ​50%​ ​of
people​ ​globally​ ​have​ ​bank​ ​accounts,​ ​and​ ​cryptocurrencies​ ​are​ ​taking​ ​greater​ ​footholds
among​ ​the​ ​unbanked.​ ​In​ ​the​ ​first​ ​world,​ ​the​ ​banking​ ​system​ ​is​ ​designed​ ​and​ ​regulated
to​ ​create​ ​an​ ​international​ ​insulation​ ​against​ ​volatility.​ ​While​ ​the​ ​new​ ​boom​ ​in
cryptocurrency​ ​is​ ​spawning​ ​tremendous​ ​value.​ ​The​ ​US​ ​retail​ ​banking​ ​industry​ ​is
currently​ ​not​ ​prepared​ ​to​ ​provide​ ​a​ ​fluid​ ​exchange​ ​mechanism​ ​to​ ​customers​ ​with
exposure​ ​to​ ​this​ ​market​ ​at​ ​present.​ ​Investment​ ​banking​ ​interest,​ ​however,​ ​is​ ​already
notable​ ​and​ ​is​ ​steadily​ ​rowing.
The​ ​total​ ​market​ ​for​ ​cryptocurrencies​ ​has​ ​grown​ ​past​ ​$160​ ​billion​ ​in​ ​the​ ​last​ ​year.​ ​This​ ​is
roughly​ ​equivalent​ ​to​ ​half​ ​of​ ​the​ ​value​ ​of​ ​the​ ​US​ ​ETF​ ​Bond​ ​market.​ ​A​ ​phenomenal​ ​rise
for​ ​an​ ​asset​ ​category​ ​where​ ​not​ ​only​ ​are​ ​virtually​ ​all​ ​securities​ ​unregistered,​ ​but
exchanges​ ​themselves​ ​are​ ​subject​ ​to​ ​little​ ​or​ ​no​ ​regulation.​ ​While​ ​unregulated​ ​market
are​ ​an​ ​inherently​ ​high​ ​risk​ ​proposition,​ ​the​ ​mechanisms​ ​of​ ​value​ ​transactions​ ​inherent​ ​in
the​ ​technology​ ​continue​ ​to​ ​draw​ ​remarkable​ ​investment,​ ​resulting​ ​in​ ​a​ ​more​ ​mature
system.​ ​The​ ​advent​ ​of​ ​major​ ​financial​ ​institutions​ ​as​ ​participants​ ​in​ ​this​ ​market​ ​brings
pressures​ ​across​ ​the​ ​industry​ ​to​ ​comply​ ​with​ ​established​ ​financial​ ​infrastructure
standards​ ​mitigating​ ​volatility​ ​and​ ​making​ ​risk​ ​assessment​ ​easier​ ​for​ ​investors
interested​ ​in​ ​exposure​ ​to​ ​this​ ​market.
The​ ​market​ ​for​ ​fiat​ ​currency​ ​to​ ​cryptocurrency​ ​has​ ​only​ ​been​ ​operational​ ​for​ ​a​ ​few
years.​ ​Illustrative​ ​of​ ​the​ ​current​ ​level​ ​of​ ​maturity​ ​of​ ​the​ ​industry​ ​are​ ​the​ ​relatively​ ​large
differences​ ​between​ ​prices​ ​in​ ​fiat​ ​currency​ ​of​ ​BitCoin​ ​on​ ​the​ ​various​ ​major​ ​exchanges.

17. Opportunities​ ​for​ ​arbitrage​ ​between​ ​these​ ​exchanges​ ​exist​ ​on​ ​paper,​ ​but​ ​frequently
cannot​ ​be​ ​realized​ ​due​ ​to​ ​high​ ​costs​ ​of​ ​transaction​ ​between​ ​various​ ​crypto​ ​assets​ ​and
fiat​ ​currency.​ ​In​ ​other​ ​words,​ ​the​ ​best​ ​prices​ ​will​ ​come​ ​from​ ​vendors​ ​with​ ​the​ ​lowest
liquidity,​ ​and​ ​where​ ​the​ ​order​ ​may​ ​not​ ​be​ ​realized​ ​quickly,​ ​or​ ​at​ ​the​ ​price​ ​it​ ​was​ ​placed.
Even​ ​the​ ​largest​ ​and​ ​most​ ​established​ ​providers​ ​charge​ ​fees​ ​as​ ​high​ ​as​ ​7%​ ​for​ ​fiat
transactions.
Along​ ​with​ ​fiat​ ​transaction​ ​offerings,​ ​the​ ​Vaultbank​ ​card​ ​offers​ ​the​ ​ability​ ​to​ ​hold​ ​funds​ ​in
the​ ​major​ ​cryptocurrencies​ ​with​ ​the​ ​same​ ​liquidity​ ​and​ ​transaction​ ​costs.​ ​The​ ​business
model​ ​is​ ​not​ ​based​ ​on​ ​revenue​ ​derived​ ​from​ ​spreads​ ​on​ ​these​ ​transactions,​ ​unlike​ ​any
other​ ​exchange​ ​operating​ ​today.​ ​The​ ​VaultToken​ ​is​ ​intended​ ​to​ ​offer​ ​investors​ ​exposure
to​ ​a​ ​portfolio​ ​of​ ​other​ ​assets,​ ​but​ ​does​ ​offer​ ​unique​ ​liquidity​ ​to​ ​customers​ ​with​ ​existing​ ​or
desired​ ​exposure​ ​to​ ​cryptocurrency​ ​assets.
Much​ ​like​ ​the​ ​technology​ ​boom​ ​of​ ​the​ ​early​ ​90s,​ ​many​ ​of​ ​the​ ​pioneers​ ​in​ ​this​ ​field​ ​were
amateurs​ ​and​ ​hobbyists,​ ​and​ ​the​ ​infrastructure​ ​to​ ​support​ ​the​ ​demand​ ​for​ ​their
innovations​ ​is​ ​taking​ ​time​ ​to​ ​build.​ ​The​ ​remarkable​ ​capital​ ​influx​ ​shows​ ​a​ ​widespread
market​ ​consensus​ ​around​ ​the​ ​overall​ ​value​ ​of​ ​the​ ​technology​ ​in​ ​the​ ​economy​ ​long​ ​term.
While​ ​a​ ​future​ ​correction​ ​is​ ​likely​ ​as​ ​with​ ​any​ ​emerging​ ​technology,​ ​the​ ​players
establishing​ ​themselves​ ​in​ ​the​ ​market​ ​using​ ​today’s​ ​capital​ ​availability​ ​and​ ​a​ ​clearly
sustainable​ ​and​ ​stress​ ​tested​ ​strategy​ ​are​ ​likely​ ​to​ ​dominate​ ​what​ ​is​ ​becoming​ ​a
significant​ ​sector​ ​of​ ​the​ ​global​ ​economy.​ ​With​ ​the​ ​VaultToken​ ​operating​ ​as​ ​a​ ​binding
stake​ ​in​ ​a​ ​security,​ ​in​ ​the​ ​event​ ​of​ ​a​ ​capital​ ​crunch​ ​in​ ​the​ ​cryptocurrency​ ​market,​ ​and
few​ ​providers​ ​of​ ​liquidity,​ ​the​ ​Vaultbank​ ​Token​ ​will​ ​be​ ​uniquely​ ​positioned​ ​as​ ​a​ ​liquid
and​ ​secure​ ​investment​ ​in​ ​that​ ​market.
Despite​ ​many​ ​token​ ​being​ ​purely​ ​speculative,​ ​the​ ​emergence​ ​of​ ​Ethereum​ ​and​ ​Smart
Contracts​ ​has​ ​enabled​ ​securitization​ ​of​ ​assets​ ​through​ ​blockchain​ ​technology,​ ​along
with​ ​many​ ​other​ ​applications.​ ​One​ ​of​ ​the​ ​most​ ​regulatorily​ ​contentious​ ​issues​ ​is​ ​the​ ​sale
of​ ​company​ ​equity​ ​or​ ​rights​ ​to​ ​a​ ​real​ ​estate​ ​or​ ​other​ ​portfolio​ ​through​ ​a​ ​token​ ​sale.
These​ ​applications​ ​are​ ​remarkably​ ​close​ ​in​ ​form​ ​and​ ​identical​ ​in​ ​spirit​ ​to​ ​shares​ ​or
mortgage​ ​backed​ ​securities​ ​but​ ​are​ ​currently​ ​not​ ​registered​ ​or​ ​regulated​ ​by​ ​the​ ​SEC.
This​ ​is​ ​changing​ ​rapidly,​ ​first​ ​with​ ​the​ ​ban​ ​of​ ​such​ ​“Initial​ ​Coin​ ​Offerings”​ ​in​ ​China,​ ​and
followed​ ​by​ ​sternly​ ​worded​ ​warnings​ ​from​ ​the​ ​SEC​ ​in​ ​the​ ​US.
Much​ ​as​ ​with​ ​Silicon​ ​Valley​ ​and​ ​the​ ​tech​ ​boom,​ ​the​ ​true​ ​transition​ ​from​ ​technology
concept​ ​to​ ​economic​ ​segment​ ​happens​ ​in​ ​partnership​ ​with​ ​the​ ​establishment.​ ​Venture
Capital​ ​and​ ​Investment​ ​Banking​ ​were​ ​instrumental​ ​not​ ​only​ ​to​ ​financing​ ​the​ ​explosion​ ​in
internet​ ​technology,​ ​but​ ​also​ ​in​ ​identifying​ ​the​ ​most​ ​promising​ ​value​ ​propositions.​ ​While

18. a​ ​capital​ ​crunch​ ​was​ ​experienced​ ​in​ ​the​ ​market,​ ​the​ ​more​ ​established,​ ​conservative,
and​ ​regulated​ ​players​ ​in​ ​the​ ​industry​ ​were​ ​remarkably​ ​successful​ ​in​ ​the​ ​long​ ​term,​ ​and
new​ ​giants​ ​such​ ​as​ ​Silicon​ ​Valley​ ​Bank​ ​continue​ ​to​ ​thrive.
The​ ​authors​ ​propose​ ​a​ ​Bank​ ​that​ ​is​ ​founded​ ​on​ ​the​ ​sound​ ​foothold​ ​of​ ​the​ ​established
financial​ ​industry​ ​and​ ​provides​ ​the​ ​institutional​ ​guidance,​ ​regulatory​ ​compliance,​ ​and
market​ ​liquidity​ ​currently​ ​lacking​ ​in​ ​the​ ​cryptocurrency​ ​sector.

19. Technology
Blockchain​ ​technology​ ​is​ ​still​ ​young​ ​but​ ​it​ ​has​ ​already​ ​proved​ ​its​ ​capability​ ​as​ ​an
immutable​ ​ledger.​ ​Bitcoin​ ​is​ ​a​ ​purely​ ​speculative​ ​token,​ ​and​ ​its​ ​value​ ​much​ ​like
diamonds​ ​or​ ​gold,​ ​outside​ ​of​ ​industrial​ ​uses,​ ​is​ ​entirely​ ​driven​ ​by​ ​scarcity​ ​and​ ​the
guarantee​ ​for​ ​the​ ​holder​ ​that​ ​this​ ​good​ ​is​ ​unique​ ​and​ ​transactable.​ ​While​ ​unregulated
crypto​ ​currency​ ​exchanges​ ​may​ ​not​ ​have​ ​implemented​ ​the​ ​best​ ​internal​ ​security
policies,​ ​the​ ​integrity​ ​of​ ​the​ ​block​ ​chain​ ​has​ ​never​ ​been​ ​compromised.​ ​The​ ​advent​ ​of
smart​ ​contracts​ ​enabled​ ​this​ ​technology​ ​to​ ​be​ ​used​ ​for​ ​more​ ​than​ ​the​ ​creation​ ​of​ ​scarce
digital​ ​assets​ ​with​ ​purely​ ​speculative​ ​value.​ ​Today​ ​we​ ​can​ ​create​ ​crypto​ ​currencies​ ​that,
unlike​ ​Bitcoin,​ ​offer​ ​a​ ​legally​ ​binding​ ​stake​ ​in​ ​a​ ​venture,​ ​a​ ​company,​ ​or​ ​a​ ​portfolio.
Companies​ ​seeking​ ​capital​ ​traditionally​ ​use​ ​a​ ​venture​ ​capital​ ​or​ ​public​ ​offering
mechanism​ ​to​ ​raise​ ​the​ ​needed​ ​funds.​ ​Blockchain​ ​technology​ ​allows​ ​firms​ ​to​ ​issue​ ​the
equivalent​ ​of​ ​shares​ ​through​ ​an​ ​initial​ ​coin​ ​offering​ ​which​ ​is​ ​a​ ​smart​ ​contract​ ​that
registers​ ​the​ ​equity​ ​stake​ ​of​ ​every​ ​investor​ ​through​ ​the​ ​immutable​ ​ledger​ ​of​ ​the
blockchain.​ ​The​ ​smart​ ​contracts​ ​representing​ ​equity​ ​stakes​ ​or​ ​other​ ​forms​ ​of
participation​ ​in​ ​the​ ​project​ ​raising​ ​capital​ ​are​ ​distributed​ ​in​ ​the​ ​form​ ​of​ ​tokens​ ​and
offered​ ​on​ ​a​ ​platform​ ​that​ ​investors​ ​can​ ​access​ ​from​ ​anywhere​ ​in​ ​the​ ​world.​ ​The​ ​cost
advantages​ ​of​ ​this​ ​method​ ​of​ ​financing​ ​compared​ ​to​ ​an​ ​Initial​ ​Public​ ​Offering,​ ​combined
with​ ​unfettered​ ​access​ ​to​ ​international​ ​capital​ ​markets​ ​offer​ ​a​ ​compelling​ ​value
proposition​ ​for​ ​firms​ ​seeking​ ​to​ ​raise​ ​funds.​ ​This​ ​approach​ ​has​ ​garnered​ ​significant
market​ ​validation​ ​as​ ​firms​ ​seeking​ ​capitalization​ ​conducted​ ​through​ ​Initial​ ​Coin​ ​Offerings
have​ ​already​ ​raised​ ​more​ ​investment​ ​in​ ​2017​ ​than​ ​combined​ ​US​ ​Venture​ ​Capital
investments​ ​for​ ​2016.
Blockchain​ ​technology​ ​found​ ​its​ ​success​ ​largely​ ​from​ ​the​ ​crash​ ​of​ ​2008​ ​and​ ​the
subsequent​ ​lack​ ​of​ ​confidence​ ​in​ ​mainstream​ ​finance​ ​created​ ​an​ ​ecosystem​ ​ripe​ ​for​ ​the
adoption​ ​of​ ​concepts​ ​as​ ​“Trustless​ ​accounting”.​ ​Fiat​ ​money​ ​derives​ ​its​ ​value​ ​from​ ​the
faith​ ​of​ ​a​ ​consumer​ ​that​ ​the​ ​tender​ ​will​ ​be​ ​honored​ ​by​ ​a​ ​bank,​ ​government,​ ​or​ ​other
centralized​ ​authority.

20. Reporting
In​ ​the​ ​manner​ ​of​ ​a​ ​traditional​ ​security,​ ​Vaultbank​ ​will​ ​be​ ​issuing​ ​quarterly​ ​and​ ​annual
reports​ ​on​ ​Vaultbank.​ ​As​ ​per​ ​regulatory​ ​guidelines,​ ​these​ ​reports​ ​will​ ​include​ ​such
things​ ​as​ ​analysis​ ​on​ ​portfolio​ ​holdings​ ​as​ ​well​ ​as​ ​the​ ​underlying​ ​Vaultbank​ ​token.
These​ ​reports​ ​will​ ​provide​ ​the​ ​investor​ ​the​ ​knowledge​ ​which​ ​allows​ ​them​ ​to​ ​judge​ ​the
present​ ​state​ ​of​ ​risk​ ​of​ ​their​ ​investment.​ ​Through​ ​the​ ​employment​ ​of​ ​these​ ​financial
industry​ ​standards​ ​and​ ​protocols,​ ​investors​ ​will​ ​be​ ​able​ ​to​ ​evaluate​ ​the​ ​status​ ​of​ ​their
Vaultbank​ ​Tokens​ ​within​ ​their​ ​wider​ ​portfolio.​ ​The​ ​regular​ ​quarterly​ ​and​ ​annual​ ​reports
posted​ ​to​ ​our​ ​website​ ​shall​ ​conform​ ​to​ ​the​ ​SEC​ ​guidelines​ ​for​ ​10-Q​ ​and​ ​10-K​ ​reporting.
In​ ​addition​ ​to​ ​financial​ ​reporting,​ ​VaultBank​ ​will​ ​provide​ ​Token​ ​Holders​ ​details​ ​on​ ​new
features​ ​of​ ​the​ ​security.​ ​Our​ ​continuous​ ​improvement,​ ​financial​ ​transparency​ ​and
information​ ​regarding​ ​our​ ​upgrades​ ​and​ ​continued​ ​enhanced​ ​utility,​ ​will​ ​allow​ ​the​ ​holder
of​ ​the​ ​tokens​ ​information​ ​on​ ​how​ ​their​ ​feature​ ​set​ ​might​ ​be​ ​expanded​ ​in​ ​the​ ​future.
VaultBank​ ​will​ ​also​ ​proviode​ ​Token​ ​holders​ ​examples​ ​of​ ​possible/popular​ ​use​ ​cases​ ​for
the​ ​tokens.​ ​VaultBank​ ​also​ ​intends​ ​to​ ​report​ ​on​ ​details/charts​ ​on​ ​the​ ​current
distribution/usage​ ​of​ ​the​ ​tokens​ ​and​ ​underlying​ ​portfolio​ ​composition.
The​ ​annual​ ​report,​ ​conforming​ ​to​ ​guidelines​ ​for​ ​a​ ​securities​ ​10-K​ ​will​ ​include​ ​detailed
information​ ​in​ ​several​ ​key​ ​areas.​ ​The​ ​annual​ ​report​ ​will​ ​describe​ ​in​ ​detail​ ​the​ ​business
practices​ ​and​ ​actions​ ​over​ ​the​ ​previous​ ​quarter.​ ​The​ ​reports​ ​will​ ​provide​ ​a​ ​basic
overview​ ​of​ ​how​ ​the​ ​organization​ ​functions​ ​as​ ​well​ ​as​ ​any​ ​current​ ​known​ ​risk​ ​factors.
Quarterly​ ​and​ ​annual​ ​reports​ ​will​ ​provide​ ​substantial​ ​financial​ ​information​ ​including
traditional​ ​financial​ ​statements​ ​as​ ​well​ ​as​ ​detailed​ ​data​ ​on​ ​the​ ​performance​ ​of​ ​the
portfolio,​ ​as​ ​well​ ​as​ ​statistics​ ​on​ ​the​ ​Vaultbank​ ​Token.
Industry​ ​standard​ ​stress​ ​testing​ ​by​ ​our​ ​warehouse​ ​lender​ ​shall​ ​be​ ​performed​ ​on​ ​a
regular​ ​basis​ ​further​ ​ensuring​ ​the​ ​security,​ ​safety​ ​and​ ​soundness​ ​of​ ​the​ ​VaultBank
portfolio.​ ​Details​ ​and​ ​analysis​ ​of​ ​these​ ​rigorous​ ​stress​ ​tests​ ​shall​ ​be​ ​reported​ ​in​ ​the
reports​ ​posted​ ​to​ ​our​ ​website.​ ​The​ ​regular​ ​portfolio​ ​reviews​ ​are​ ​used​ ​by​ ​our​ ​warehouse
lender​ ​to​ ​determine​ ​the​ ​interest​ ​rate​ ​at​ ​which​ ​they​ ​will​ ​as​ ​well​ ​as​ ​the​ ​advance​ ​rate​ ​and
any​ ​additional​ ​requirements​ ​for​ ​the​ ​surety​ ​wrap.
While​ ​most​ ​cryptocurrency​ ​firms​ ​tout​ ​the​ ​transparency​ ​of​ ​the​ ​blockchain​ ​as​ ​a​ ​cure-all​ ​to
the​ ​ills​ ​of​ ​financial​ ​statements​ ​much​ ​of​ ​the​ ​operations​ ​of​ ​an​ ​enterprise​ ​still​ ​occurs
through​ ​traditional​ ​channels​ ​i.e.​ ​off​ ​the​ ​blockchain.​ ​Most​ ​companies​ ​involved​ ​in​ ​the
blockchain​ ​lack​ ​the​ ​stress​ ​testing​ ​and​ ​other​ ​evaluation​ ​tools​ ​commonly​ ​applied
throughout​ ​the​ ​financial​ ​industry​ ​to​ ​verify​ ​the​ ​safety,​ ​solvency​ ​and​ ​sustainability​ ​of

21. investable​ ​assets​ ​and​ ​institutions.​ ​Coinbase,​ ​the​ ​largest​ ​exchange​ ​on​ ​the​ ​market,​ ​offers
no​ ​accounting​ ​transparency.
In​ ​keeping​ ​with​ ​traditional​ ​securities​ ​requirements,​ ​Vaultbank​ ​will​ ​have​ ​an​ ​independent
audit​ ​annually​ ​by​ ​an​ ​outside​ ​accounting​ ​firm.​ ​These​ ​independent​ ​audit​ ​reports​ ​of​ ​the
financial​ ​statements​ ​will​ ​appear​ ​in​ ​the​ ​annual​ ​report.
Because​ ​every​ ​tool​ ​can​ ​potentially​ ​be​ ​used​ ​for​ ​illicit​ ​purposes​ ​Vaultbank​ ​will​ ​become
registered​ ​as​ ​a​ ​money​ ​services​ ​business​ ​with​ ​the​ ​United​ ​States​ ​Department​ ​of​ ​the
Treasury​ ​Bureau​ ​of​ ​Financial​ ​Crimes​ ​Enforcement​ ​Network​ ​(FinCEN).​ ​As​ ​a​ ​part​ ​of
maintaining​ ​its​ ​FinCEN​ ​protocols,​ ​Vaultbank​ ​will​ ​follow​ ​the​ ​guidelines​ ​established​ ​to
conform​ ​to​ ​the​ ​USA​ ​PATRIOT​ ​Act​ ​section​ ​314​ ​(c),​ ​that​ ​provides​ ​financial​ ​institutions
with​ ​the​ ​ability​ ​to​ ​share​ ​information​ ​with​ ​one​ ​another​ ​under​ ​a​ ​safe​ ​harbor​ ​protection
from​ ​liability.​ ​This​ ​voluntary​ ​program​ ​of​ ​information​ ​sharing​ ​allows​ ​for​ ​enhanced
compliance​ ​to​ ​the​ ​federal​ ​anti-money​ ​laundering/counter-terrorist​ ​financing​ ​(AML/CFT)
requirements.
As​ ​a​ ​part​ ​of​ ​Vaultbank​ ​anti-money​ ​laundering​ ​policies,​ ​Vaultbank​ ​has​ ​established​ ​a
Know​ ​Your​ ​Customer​ ​(KYC)​ ​policy.​ ​Implementation​ ​involves​ ​the​ ​formulation​ ​and
creation​ ​of​ ​KYC​ ​compliant​ ​policies.​ ​Upon​ ​the​ ​ICO​ ​Vaultbank​ ​will​ ​maintain​ ​a​ ​KYC
compliant​ ​customer​ ​acceptance​ ​policy​ ​which​ ​includes:​ ​(i)​ ​risk​ ​assessment​ ​for​ ​identity
theft,​ ​(ii)​ ​money​ ​laundering​ ​terrorist​ ​finance,​ ​and​ ​(iii)​ ​identification​ ​of​ ​Politically​ ​Exposed
Persons​ ​as​ ​part​ ​of​ ​anti-corruption/anti-bribery​ ​efforts.​ ​A​ ​policy​ ​for​ ​customer​ ​identity
verification​ ​will​ ​be​ ​implemented​ ​with​ ​the​ ​requirement​ ​of​ ​presentation​ ​of​ ​fundamental
identity​ ​documents.​ ​Once​ ​the​ ​client​ ​is​ ​correctly​ ​identified​ ​and​ ​entered​ ​into​ ​the​ ​Vaultbank
system,​ ​their​ ​transactions​ ​will​ ​be​ ​monitored​ ​and​ ​analyzed​ ​for​ ​money-laundering​ ​and
other​ ​financial​ ​crimes.​ ​With​ ​the​ ​features​ ​of​ ​the​ ​blockchain​ ​namely​ ​that​ ​all​ ​transitions​ ​are
available​ ​for​ ​analysis​ ​in​ ​the​ ​immutable​ ​blockchain​ ​independent/secondary​ ​anti-money
laundering​ ​software​ ​can​ ​be​ ​run​ ​at​ ​any​ ​time.​ ​​ ​Furthermore​ ​because​ ​Vaultbank​ ​will​ ​be
dealing​ ​with​ ​credit​ ​card​ ​transnational​ ​data​ ​they​ ​will​ ​conform​ ​to​ ​the​ ​payment​ ​card
industry​ ​data​ ​security​ ​standard​ ​which​ ​will​ ​be​ ​annually​ ​analyzed​ ​for​ ​compliance​ ​by​ ​a
Qualified​ ​Security​ ​Assessor​ ​who​ ​will​ ​generate​ ​reports​ ​which​ ​will​ ​be​ ​made​ ​available​ ​in
the​ ​annual​ ​report.
TenX,​ ​one​ ​of​ ​the​ ​successful​ ​companies​ ​in​ ​the​ ​cryptocurrency​ ​financial​ ​services​ ​market
segment​ ​have​ ​a​ ​decidedly​ ​different​ ​approach.​ ​Rather​ ​than​ ​registering​ ​their​ ​tokens​ ​as
securities​ ​with​ ​all​ ​the​ ​benefits​ ​therein,​ ​they​ ​have​ ​instead​ ​​ ​chosen​ ​to​ ​treat​ ​them​ ​as​ ​a
license.​ ​This​ ​license​ ​is​ ​analogous​ ​to​ ​a​ ​taxicab​ ​medallion​ ​in​ ​that​ ​they​ ​are​ ​purchased​ ​in
order​ ​to​ ​be​ ​granted​ ​a​ ​license​ ​to​ ​the​ ​rights,​ ​privileges,​ ​and​ ​features​ ​of​ ​participating​ ​in​ ​the

22. marketplace​ ​of​ ​running​ ​a​ ​taxi.​ ​In​ ​addition​ ​TenX​ ​has​ ​not​ ​registered​ ​as​ ​a​ ​money​ ​services
business.
While​ ​the​ ​market​ ​for​ ​cryptocurrencies​ ​has​ ​grown​ ​up​ ​to​ ​$160​ ​billion​ ​dollars,​ ​financial
institutions​ ​offering​ ​liquidity​ ​for​ ​holders​ ​of​ ​cryptocurrencies​ ​are​ ​widely​ ​unregulated.​ ​Even
the​ ​largest​ ​cryptocurrency​ ​exchange​ ​Coinbase​ ​does​ ​not​ ​provide​ ​FDIC​ ​insurance​ ​to​ ​its
holders.​ ​Recently​ ​the​ ​SEC​ ​has​ ​issued​ ​warnings​ ​that​ ​make​ ​it​ ​likely​ ​that​ ​regulators​ ​are
actively​ ​scrutinizing​ ​this​ ​market.​ ​Vaultbank​ ​has​ ​taken​ ​the​ ​proactive​ ​stance​ ​of​ ​registering
not​ ​only​ ​as​ ​a​ ​money​ ​services​ ​business​ ​but​ ​posses​ ​an​ ​international​ ​banking​ ​license​ ​to
comply​ ​with​ ​regulatory​ ​guidelines​ ​in​ ​the​ ​United​ ​States,​ ​European​ ​Union,​ ​and​ ​most​ ​other
jurisdictions.
Compliance
The​ ​SEC​ ​continues​ ​to​ ​set​ ​forth​ ​a​ ​multitude​ ​of​ ​regulatory​ ​guidelines​ ​for​ ​the​ ​exchange​ ​of
securities.​ ​The​ ​Vaultbank​ ​token​ ​is​ ​being​ ​submitted​ ​to​ ​the​ ​SEC​ ​via​ ​Form​ ​D​ ​under​ ​rule
506(c)​ ​of​ ​Regulation​ ​D,​ ​which​ ​is​ ​an​ ​exception​ ​from​ ​section​ ​4(a)(2)​ ​of​ ​the​ ​Securities​ ​Act.
This​ ​particular​ ​section​ ​of​ ​regulation​ ​D​ ​allows​ ​for​ ​Vaultbank​ ​to​ ​“broadly​ ​solicit​ ​and
generally​ ​advertise​ ​the​ ​offering…” ​ ​While​ ​under​ ​other​ ​rules​ ​and​ ​regulations​ ​securities
1
are​ ​controlled​ ​by​ ​various​ ​types​ ​of​ ​brokers​ ​and​ ​brokerage​ ​firms​ ​which​ ​have​ ​their​ ​own​ ​set
of​ ​strengths​ ​and​ ​weakness​ ​particular​ ​in​ ​how​ ​potential​ ​investors​ ​can​ ​be​ ​solicited.​ ​One​ ​of
the​ ​primary​ ​strengths​ ​of​ ​506(c)​ ​is​ ​that​ ​it​ ​allows​ ​for​ ​the​ ​direct​ ​advertisement​ ​of​ ​the
investment​ ​on​ ​platforms​ ​such​ ​as​ ​social​ ​media​ ​channels.​ ​In​ ​recent​ ​years​ ​much​ ​interest
has​ ​been​ ​paid​ ​to​ ​506(c)​ ​and​ ​how​ ​it​ ​applies​ ​to​ ​raising​ ​investment​ ​via​ ​crowdfunding
platforms.​ ​While​ ​there​ ​are​ ​separate​ ​provisions​ ​for​ ​crowdfunding​ ​platforms​ ​which​ ​allow
them​ ​to​ ​reach​ ​non-accredited​ ​investors​ ​the​ ​SEC​ ​guidelines​ ​also​ ​cap​ ​the​ ​size​ ​of​ ​the
funding​ ​being​ ​raised​ ​to​ ​$1​ ​million​ ​dollars.​ ​In​ ​deference​ ​506(c)​ ​allows​ ​for​ ​an​ ​unlimited
amount​ ​of​ ​funds​ ​to​ ​be​ ​raised​ ​via​ ​crowdfunding​ ​platforms​ ​but​ ​it​ ​does​ ​require​ ​accredited
investor​ ​verification​ ​so​ ​that​ ​only​ ​accredited​ ​investors​ ​can​ ​participate.
In​ ​the​ ​case​ ​of​ ​Vaultbank​ ​all​ ​the​ ​tokens​ ​will​ ​be​ ​distributed​ ​during​ ​the​ ​initial​ ​offering.​ ​The
blockchain​ ​system​ ​Vaultbank​ ​will​ ​allow​ ​for​ ​several​ ​key​ ​improvements.​ ​The​ ​Vaultbank
system​ ​allows​ ​investors​ ​to​ ​liquidate​ ​their​ ​tokens​ ​at​ ​any​ ​time​ ​for​ ​their​ ​full​ ​market​ ​value
without​ ​the​ ​normal​ ​fee’s​ ​associated​ ​on​ ​the​ ​trade.​ ​With​ ​the​ ​powerful​ ​functionality​ ​of​ ​a
blockchain​ ​based​ ​system​ ​the​ ​Vaultbank​ ​token​ ​is​ ​easily​ ​fractionalized​ ​allowing​ ​for​ ​further
increases​ ​in​ ​liquidity.​ ​Fractionalization​ ​allows​ ​for​ ​partial​ ​withdrawals​ ​of​ ​investment​ ​thus
reducing​ ​some​ ​of​ ​the​ ​rIsk​ ​on​ ​the​ ​part​ ​of​ ​the​ ​investor.​ ​By​ ​making​ ​use​ ​of​ ​the​ ​Blockchain
1
​ ​https://www.sec.gov/fast-answers/answers-rule506htm.html

23. for​ ​keeping​ ​track​ ​of​ ​who​ ​is​ ​in​ ​position​ ​of​ ​the​ ​Vaultbank​ ​tokens​ ​​ ​the​ ​monthly​ ​costs
associated​ ​with​ ​maintaining​ ​the​ ​database​ ​are​ ​minimized​ ​thus​ ​benefiting​ ​the​ ​investor.
The​ ​secondary​ ​market​ ​also​ ​benefits​ ​from​ ​being​ ​able​ ​to​ ​safeguard​ ​against​ ​two​ ​people
mistakenly​ ​believing​ ​they​ ​posses​ ​the​ ​same​ ​token.​ ​Fractionalization​ ​also​ ​allows​ ​for
smaller​ ​investors​ ​on​ ​the​ ​secondary​ ​market​ ​than​ ​normal​ ​would​ ​be​ ​possible​ ​for​ ​a​ ​security.
PRIVACY​ ​NOTICE
VaultBank​ ​strives​ ​to​ ​enact​ ​a​ ​supreme​ ​standard​ ​of​ ​confidentiality​ ​for​ ​the​ ​purpose​ ​of
paying​ ​deference​ ​to​ ​the​ ​privacy​ ​assumed​ ​between​ ​a​ ​client​ ​and​ ​financial​ ​institutional
relationship.​ ​With​ ​this​ ​in​ ​mind,​ ​VaultBank​ ​is​ ​making​ ​available​ ​in​ ​a​ ​clear​ ​and
conspicuous​ ​manner​ ​this​ ​Privacy​ ​Notification​ ​to​ ​our​ ​clients​ ​by​ ​Title​ ​V​ ​of​ ​the
Gramm-Leach-Bliley​ ​Act​ ​of​ ​1999​ ​and​ ​its​ ​implementing​ ​regulations​ ​included​ ​but​ ​not
limited​ ​to​ ​Regulation​ ​S-P.​ ​This​ ​notification​ ​serves​ ​as​ ​a​ ​supplementary​ ​material​ ​to​ ​any
all​ ​privacy​ ​policies,​ ​statements,​ ​notices,​ ​directives,​ ​notifications,​ ​etc.​ ​that​ ​VaultBank
may​ ​make​ ​available​ ​in​ ​association​ ​with​ ​individual​ ​services,​ ​features,​ ​and​ ​products.
On​ ​the​ ​Information​ ​VaultBank​ ​collects​ ​on​ ​the​ ​client.
Account​ ​applications​ ​and​ ​other​ ​forms​ ​submitted​ ​to​ ​VaultBank​ ​are​ ​the​ ​primary​ ​avenues
for​ ​the​ ​collection​ ​of​ ​“non-public​ ​personal​ ​information”​ ​from​ ​the​ ​end​ ​user(customer,
consumer,​ ​client,​ ​etc...)​ ​Although​ ​Vaultbank's​ ​data​ ​collection​ ​is​ ​not​ ​limited​ ​to
original/primary​ ​collection​ ​and​ ​may​ ​also​ ​include​ ​for​ ​example:​ ​non-public​ ​personal
information​ ​from​ ​consumer​ ​reporting​ ​agencies​ ​​ ​Non-public​ ​personal​ ​information​ ​may
also​ ​be​ ​collected​ ​by​ ​VaultBank​ ​about​ ​experiences​ ​with​ ​VaultBank,​ ​and​ ​its​ ​affiliates
within​ ​the​ ​scope​ ​of​ ​VaultBank(and​ ​its​ ​affiliates)​ ​products/services​ ​in​ ​addition​ ​to
transactional​ ​data.
On​ ​Disclosure​ ​Policies.
VaultBank​ ​does​ ​not​ ​disclose/release​ ​the​ ​end​ ​user’s​ ​non-public​ ​personal​ ​Information​ ​to
anyone,​ ​except​ ​where​ ​permitted​ ​by​ ​law.​ ​VaultBank's​ ​disclosure​ ​of​ ​​non-public​ ​personal
information​​ ​​ ​may​ ​include​ ​but​ ​is​ ​not​ ​limited​ ​to​ ​​ ​sharing​ ​the​ ​end​ ​user’s(customer,
consumer,​ ​client,​ ​etc…)​ ​Information​ ​with​ ​nonaffiliated​ ​companies​ ​tasked​ ​with​ ​support
services​ ​for​ ​the​ ​end​ ​user’s(customer,​ ​consumer,​ ​client,​ ​etc…)​ ​account​ ​or​ ​with​ ​the
processing​ ​of​ ​transactions​ ​with​ ​VaultBank​ ​and​ ​its​ ​affiliates.​ ​Additionally,​ ​non-public
personal​ ​information​ ​may​ ​be​ ​disclosed​ ​to​ ​comply​ ​with​ ​relevant​ ​laws​ ​and​ ​regulations,​ ​as
well​ ​as​ ​in​ ​cases​ ​where​ ​the​ ​end​ ​user(customer,​ ​consumer,​ ​client,​ ​etc…)​ ​gives

24. permission​ ​or​ ​instructs​ ​that​ ​non-public​ ​personal​ ​information​ ​be​ ​disclosed.
Conclusion
It​ ​is​ ​your​ ​right​ ​to​ ​participate​ ​in​ ​the​ ​system​ ​of​ ​tokens.​ ​​ ​An​ ​individual​ ​token​ ​is​ ​a​ ​license​ ​to
participate​ ​in​ ​the​ ​token​ ​market​ ​system​ ​much​ ​like​ ​a​ ​taxi​ ​medallion​ ​entitles​ ​one​ ​to
participate​ ​in​ ​the​ ​market​ ​for​ ​cabs.​ ​The​ ​token​ ​does​ ​not​ ​give​ ​voting​ ​rights,​ ​but​ ​does
provide​ ​direct​ ​ownership​ ​over​ ​the​ ​entire​ ​system​ ​itself,​ ​as​ ​well​ ​as​ ​the​ ​privilege​ ​of​ ​access
to​ ​the​ ​opportunities/features​ ​of​ ​the​ ​token​ ​market​ ​system.
Corporate​ ​Governance
VaultBank​ ​is​ ​managed​ ​by​ ​its​ ​core​ ​team​ ​of​ ​senior​ ​executives​ ​with​ ​oversight​ ​from​ ​its’
active​ ​Board​ ​of​ ​Directors,​ ​which​ ​has​ ​been​ ​assembled​ ​based​ ​on​ ​their​ ​specific​ ​experience
in​ ​what​ ​VaultBank​ ​believes​ ​to​ ​be​ ​core​ ​and​ ​critical​ ​success​ ​factors​ ​for​ ​VaultBank.
Team
VaultBank​ ​has​ ​assembled​ ​and​ ​industry​ ​leading​ ​technical​ ​and​ ​financial​ ​services​ ​team.
Austin​ ​Trombley,​ ​CTO
Austin​ ​Trombley,​ ​MBA,​ ​is​ ​an​ ​avid​ ​Data​ ​Engineer​ ​and​ ​Data​ ​Scientist,​ ​with​ ​a
decade​ ​of​ ​consulting​ ​and​ ​leadership​ ​experience​ ​at​ ​7​ ​Fortune​ ​500​ ​companies.​ ​He
recently​ ​ran​ ​the​ ​data​ ​strategy​ ​at​ ​Prosper​ ​-​ ​which​ ​upended​ ​banks​ ​from​ ​credit,​ ​and
co-founded​ ​a​ ​Quantitative​ ​Credit​ ​Hedge​ ​Fund,​ ​Random​ ​Forest​ ​Capital.
Stuart​ ​Shelly,​ ​COO
Stuart​ ​has​ ​30​ ​years​ ​of​ ​finance​ ​and​ ​banking,​ ​with​ ​experience​ ​in​ ​large​ ​institutions
(KPMG,​ ​BofA,​ ​BMo,​ ​GE)​ ​and​ ​entrepreneurial​ ​situations.​ ​As​ ​head​ ​of​ ​Transitional​ ​Capital
Management,​ ​he​ ​serves​ ​as​ ​a​ ​Merchant​ ​Bank​ ​to​ ​identify,​ ​structure,​ ​and​ ​finance
investment​ ​opportunities​ ​in​ ​specialty​ ​finance.​ ​His​ ​specialties​ ​include​ ​debt,​ ​equity,​ ​and
structured​ ​finance​ ​products.
Christopher​ ​Cummock,​ ​Managing​ ​Director
Christopher​ ​has​ ​over​ ​10​ ​years​ ​of​ ​experience​ ​in​ ​investment​ ​and​ ​portfolio

25. management,​ ​investment​ ​banking,​ ​syndicate​ ​calendar​ ​trading,​ ​and​ ​corporate​ ​finance.
He​ ​holds​ ​two​ ​master's​ ​degrees​ ​from​ ​Florida​ ​International​ ​University​ ​including​ ​an​ ​MBA
and​ ​Masters​ ​of​ ​Science​ ​in​ ​Finance,​ ​and​ ​an​ ​undergraduate​ ​degree​ ​from​ ​USC.
John​ ​Castaldo,​ ​Managing​ ​Director
John​ ​joins​ ​the​ ​Vaultbank​ ​team​ ​after​ ​over​ ​a​ ​decade​ ​as​ ​CEO​ ​and​ ​Owner​ ​of​ ​Raven
Global​ ​Security​ ​Incorporated.​ ​John​ ​is​ ​also​ ​a​ ​specialist,​ ​entrepreneur,​ ​and​ ​consultant​ ​in
foreign​ ​market​ ​entry​ ​strategies,​ ​including​ ​global​ ​payments​ ​and​ ​transactions​ ​services.​ ​He
holds​ ​an​ ​undergraduate​ ​degree​ ​from​ ​Pace​ ​University.
Phil​ ​Guertin,​ ​(title)
Phil​ ​joins​ ​the​ ​VaultBank​ ​team​ ​as​ ​part​ ​of​ ​the​ ​acquisition​ ​of​ ​Express​ ​Cash​ ​Flow
(“ECF”).​ ​Phil,​ ​built​ ​ECF​ ​over​ ​the​ ​past​ ​two​ ​years,​ ​and​ ​as​ ​part​ ​of​ ​VaultBanks​ ​ICO,​ ​ma
portion​ ​of​ ​the​ ​proceeds​ ​will​ ​be​ ​used​ ​to​ ​acquire​ ​90%​ ​of​ ​ECF,​ ​with​ ​Phil​ ​retaining​ ​the
remaining​ ​10%,​ ​which​ ​he​ ​will​ ​exchange​ ​into​ ​VaultBank​ ​Tokens​ ​at​ ​pre-ICO​ ​valuation.
Phil​ ​has​ ​over​ ​20​ ​years​ ​of​ ​experience​ ​in​ ​unique​ ​specialty​ ​finance​ ​asset​ ​classes​ ​ranging
from​ ​specialty​ ​and​ ​traditional​ ​mortgages​ ​to​ ​factoring​ ​contracts.
Stefanie​ ​Shelly,​ ​Senior​ ​Director
Stefanie​ ​has​ ​over​ ​20​ ​years​ ​of​ ​experience​ ​in​ ​specialty​ ​finance​ ​and
entrepreneurship​ ​in​ ​the​ ​financial​ ​services​ ​sector.​ ​Stefanie,​ ​is​ ​an​ ​owner​ ​of​ ​Transitional
Capital​ ​Management,​ ​with​ ​her​ ​husband​ ​Stuart,​ ​previously​ ​she​ ​had​ ​sales​ ​leadership
positions​ ​with​ ​several​ ​mortgage​ ​and​ ​other​ ​specialty​ ​finance​ ​lending​ ​platforms.
Board
Tony​ ​Leng
Tony​ ​is​ ​a​ ​Managing​ ​Director​ ​at​ ​Diversified​ ​Search​ ​and​ ​over​ ​the​ ​years​ ​has
headed​ ​up​ ​the​ ​Technology,​ ​CIO​ ​and​ ​Private​ ​Equity​ ​practices​ ​for​ ​the​ ​firm.​ ​​ ​He​ ​also​ ​leads
the​ ​firm’s​ ​San​ ​Francisco​ ​office.​ ​​ ​Previously,​ ​Tony​ ​was​ ​Managing​ ​Partner​ ​of​ ​Hodge
Partners​ ​and​ ​a​ ​Partner​ ​at​ ​Heidrick​ ​&​ ​Struggles.​ ​Tony’s​ ​clients​ ​include​ ​public​ ​and​ ​private
companies​ ​where​ ​he​ ​has​ ​placed​ ​Board​ ​Members,​ ​CEOs,​ ​CFOs,​ ​CIOs​ ​and​ ​other​ ​C-level
executives.
The​ ​core​ ​of​ ​Tony’s​ ​consulting​ ​has​ ​been​ ​with​ ​senior​ ​leaders​ ​who​ ​are​ ​seeking​ ​to
transform​ ​their​ ​organizations​ ​as​ ​they​ ​face​ ​a​ ​future​ ​of​ ​rapid​ ​change,​ ​digitization,
regulation,​ ​shifting​ ​markets,​ ​and​ ​increasingly​ ​connected​ ​and​ ​informed​ ​customers.