Frequently Asked Questions

Frequently Asked Questions

1. If I invest in IML, will I be exposed to cryptocurrency and the associated volatility risk?

• IML offers investors the ability to take advantage of the volatile nature of the cryptocurrency market without risking direct exposure.

2. What investor requirements are there?

• A minimum investment of $100 is required during the pre-token sale (prior to October 2019).
• Providing basic ID documentation after signing to the token sale agreement — also called a Simple Agreement for Future Tokens (SAFT)

3. Will I benefit from fund earnings if I invest now prior to tokens being issued?

• Yes, the initial capitalization of the fund is already complete and the fund is operational.
• Token prices are updated daily and purchased tokens are assigned value daily at the new token price (using forward pricing).
• When tokens are distributed, you will receive the number of tokens calculated at the time of your investment.
• Your investment will benefit from any increase in the token NAV from the point of your investment being processed.

4. What cryptocurrencies/stablecoins can I invest with?

• We prefer investment in TUSD, but will accept USDT in the initial sale period.

5. Can I invest with any other Fiat currencies (EUR etc)?

• The fund is a USD-denominated fund. We do not wish to expose the fund to currency risk, and therefore cannot accept payment in EUR You have 2 options to invest indirectly:
  1. Wire transfer USD to TrustToken, which will incur wire fees or
  2. Purchase your preferred cryptocurrency on an exchange, after which you can exchange for TUSD.

6. How are the fees calculated?

• Fees (management fee and performance fee) are accrued daily and included in the calculation of the daily token price for the purposes of dealing (entry and exit). A management fee of 2% per annum is charged, as well as a performance fee of 20% for outperformance over a hurdle rate.

7. What is the difference between investing in IML vs manually lending on an exchange?

• IML has professional traders actively managing the fund on a 24 /7 basis. This is not always feasible for the individual investor. Margin lending rates fluctuate substantially intra-day; actively managing orders is a full-time job to ensure that higher rates are achieved.
• There are potential tax advantages to holding an investment that grows in value as opposed to deriving margin lending earnings in your own personal capacity i.e. Capital Gains Tax, as opposed to Income Tax.

8. Will you ever change the limit to USD-Lending and TUSD for investing?

• Once our investing process for the margin lending fund is automated, we will remove the minimum investment value. We will also add additional USD denominated stablecoins as investment currencies in due course.

9. What are the risks associated with lending to margin traders?

• The main risk of margin lending is counterparty risk, which is mitigated by the trading rules imposed by crypto exchanges.
• All large margin lending platforms require either a high maintenance margin or automatically close losing positions, such that it is not possible for margin traders to have a negative trading balance (i.e. by design there are no losses for the lender).
• Further, exchanges also maintain substantial insurance pools which provides further protection of funds should the market move quickly for losing positions to be closed.
• No losses have been realized to date on loans provided on the top tier lending platforms on which the fund will be operating.

10. Is there any security put in place if one of the exchanges used to lend is hacked?

• As the fund is mostly exposed to USD, (actual fiat), which can’t be hacked, this is somewhat less of a concern than lending BTC etc. However, once the fund is larger, we plan to expand the range of exchanges lending occurs on to reduce the concentration risk.