FAQ – Segregated Facility EPD
Can I deposit coins and bars of varying fineness?
Yes, you are able to deposit gold and silver coins and bars of varying fineness.
However, in circumstances where the coin or bar deposit is below the fineness of .9999 for gold and .999 for silver, Kinesis has implemented strict rules to ensure that 1 KAU remains based on an exact 1:1 allocation of 1 gram of .9999 fine physical gold bullion and 1 KAG remains based on an exact 1:1 allocation of 1 oz of .999 fine silver, and the integrity of the Kinesis Monetary System is preserved, at all times.
See the question below, or visit the coins and bars section of the EPD page for full details – here.
How will Kinesis ensure that 1 KAU is always based on 1g .9999 fine gold and 1 KAG is based on 1oz of .999 fine silver?
Kinesis has implemented the following emission rules to ensure that 1 KAU is based on an exact 1:1 allocation of 1g of .9999 fine gold, and 1 KAG is based on an exact 1:1 allocation of 1oz of .999 silver. at all times.
Kinesis will only recognise the value of the metal that each coin contains.
Kinesis users wishing to deposit coins or bars will need to have their coin and/or bar collection assayed at their expense with a service provider of Kinesis’ choosing. The assayer will provide Kinesis with details of the fine weight of the gold contained in each submitted coin and/or bar.
Please see the EPD requirements page for the full emission schedule – here.
In this way, each 1 KAU emitted to the depositor will be based on an exact allocation of 1 gram of .9999 fine gold, and 1 KAG emitted to the depositor will be based on an exact allocation of 1 ounce of .999 fine silver, and Kinesis will ensure the integrity of the Kinesis Monetary System is preserved.
Please visit the EPD page for more info – here.
Will the coins and bars be audited?
Yes, all coins, bars and ingots will be independently audited twice a year.
We employ the world-class independent audit and inspection specialist, Inspectorate International, a Bureau Veritas company, to conduct regular, independent, physical audits of all physical gold and silver underpinning Kinesis gold and silver-based digital currencies.
All our audits are publicly available – here.
What are the minimum deposit requirements?
For your coins or bars to qualify for EPD you must have a minimum deposit size of at least 3.22ozt .9999 gold, equivalent to at least 100 KAU, or in the case of KAG, a minimum deposit size of at least 200ozt 999 silver, equivalent to at least 200 KAG.
Can I bring small bars and ingots into the Kinesis segregated facility?
Yes, subject to approval, small bars and ingots can be deposited into the Kinesis segregated facility.
Can I deposit coins and bars within the same EPD cycle?
Yes, users are able to deposit coins, bars and ingots within the same EPD cycle.
Can I deposit silver coins, bars or ingots?
Yes, subject to approval, silver bars and silver ingots can be deposited into the Kinesis segregated facility.
What are the fees?
There is a 1% deposit fee charged on all coins and bars deposited via the Exchange Physical for Digital (Coins – bars) process.
There is a 2.5% p.a. segregated management fee, charged monthly at 0.2083% per month.
Kinesis users wishing to deposit coins or bars will need to have their coin and/or bar collection assayed at their expense with a service provider of Kinesis’ choosing. Additionally, fees will be charged for both the delivery and cataloguing of the coin or bar holdings.
Assay, delivery and cataloguing fees are calculated on individual circumstances and we will provide a quote after assessment.
Visit the EPD page on the Kinesis Mint to apply and receive a personalised quote.
How are my coins and bars stored? Is the storage segregated?
Yes, the storage is segregated. The segregated coins and bars are stored within the ABX cage of the participating vaulting provider, and are attributed to the individual depositor.
In addition to the general information about the deposit, the tube/box/bag number, depositor information, and special notes, such as observed damage, year, edition etc, and, importantly, the KMS HIN of the depositor, would be recorded in the ABX Vault Management System.
Can I redeem my coins and bars?
Yes, the coins and bars deposited for EPD can be redeemed at any time.
The original depositor or an authorized representative of the depositor via redemption are able to request redemption via the redemption tab of the settings page on the KM platform. In this case, the depositor would need to return the respective number of KAU/KAG to the emission address and pay redemption fees.
The coins deposits are virtually segregated to the depositor and cannot be withdrawn by other participants.
This will remain in effect unless the depositor fails to meet the Balance Maintenance Requirement or fails to pay the minimum segregated management fee.
Can another Kinesis user redeem my coins and bars?
No, only the depositor can withdraw their coins or bars from segregated storage.
These coins/bars will not be withdrawn unless expressly requested by the original depositor or an authorized representative of the depositor via redemption.
The coins/bars deposited are effectively segregated to the depositor and cannot be withdrawn by other Kinesis system participants.
This will remain in effect unless the depositor fails to meet the Balance Maintenance Requirement or fails to pay the segregated management fee.
What are the redemption fees? What are the minimum requirements?
Kinesis gold (KAU) and Kinesis silver (KAG) holders are fully entitled to redeem the underlying coins and bars their KAU or KAG are based on, subject to withdrawal fees and minimum withdrawal requirements.
The minimum withdrawal requirement for gold coins and gold bars is a quantity of coins and bars with a combined fine weight of a minimum of 100 grams of .9999 gold. The minimum withdrawal requirement for silver coins and silver bars is a quantity of coins and bars with a combined fine weight of a minimum of 200 ounces of .999 silver.
The redemption cost and minimum withdrawal requirements of Kinesis are among the lowest in the industry. Redeeming bullion simultaneously liquidates the digital representation of the bullion and removes the respective currency from KAU or KAG circulation.
Is there a limit to how much of my KAU or KAG I can liquidate?
Yes, to preserve the segregated status of the deposited coins or bars, a depositor must have ⅔ of their KAU or KAG balance received from EPD of coins or bars, in their account on the last calendar day of each calendar month. This is called the Balance Maintenance Requirement.
Therefore, a depositor may liquidate as much of their KAU or KAG balance received from EPD of coins or bars deposited as they wish, as long as their KAU or KAG balance received from EPD of coins or bars deposited, is above the ⅔ requirement stated in the Balance Maintenance Requirement, on the last calendar day of the month.
The depositor must follow the Balance Maintenance Requirement rule or risk losing their holdings and the ability to redeem those coins, in exchange for KAU or KAG, in the future.
If a user redeems part of their segregated holdings, the ⅔ watermark is applied to the remaining coins or bars in segregation. There is no maximum, so long as the amount remaining does not fall below the 100 KAU or 200 KAG equivalent.
What will happen if I don’t adhere to the Balance Maintenance Requirement?
The Balance Maintenance Requirement rule means the depositor must hold at least 2/3 of the KAU or KAG received from EPD of coins or bars deposited, in their KM account, on the last calendar day of the month.
The depositor’s balance is checked monthly and if the quantity of KAU or KAG within the depositor’s account falls below the stated requirement, they will be given 30 days to top back up to the required level.
If they do not meet this requirement and the top-up warning is met with inaction, Kinesis will have the authority to remove up to 1/3 of the segregated holdings.
The depositor will now have a new watermark set that they will need to maintain at the start of the next month or they may lose segregation of up to another 1/3 of the remaining holdings.
Read the full details of the Balance Maintenance Requirement rule – here.
How do I keep track of my ⅔ holding limits?
If the user’s holdings drop below the ⅔ KAU or KAG balance limit stated in the Balance Maintenance Requirement rule, Kinesis users will be contacted via email and phone, to inform them they have 30 days to top back up to the required level.