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My Thoughts on Glint Pay by Roy Sebag Founder of Goldmoney Inc.


Empty Barrels Make the Loudest Noise

General John F. Kelly

In a race, the quickest runner can never overtake the slowest, since the pursuer must
first reach the point whence the pursued started, so that the slower must always hold a

Over the last few days, a UK-based company named Glint Pay has been making false claims about being the first
digital gold platform or, even more laughable, providing the first physical gold-backed payment card. In this short
piece, I will provide some important history about Glint, its
principals, and its investors. I will also show how both the
financial press and Glints investors have been duped by the
essence of their claim: that Glints debit card functions any
differently from the Goldmoney MasterCard unveiled
nearly three years ago.

As Charles Caleb Cotton once wrote, Imitation is the sincerest

form of flattery; but in the case of GlintPay, a persistent pattern
of blatant plagiarism is neither sincere nor flattering. And with a
long list of product misrepresentations to accompany this obvious
lack of marketing integrity, its important that we outline the
many glaring due diligence red flags, since the financial media
has neglected to do any actual journalism in the recent puff pieces on Glint.

At Goldmoney, we believe strongly in free market capitalism, innovation & competition, but we will continue to
defend the integrity of our marketplace from the unscrupulous actors that give
our industry a bad name, and potentially put clients at risk. We work closely
with and respect any retail Gold dealers that actually put their clients first and
believe in the products they sell, partners and competitors alike.

But as I will outline among many other fatal red flags below, first and
foremost we believe that Glint has no such primary mission to democratize
access to gold or build the first gold payments and savings network (I put
these branding lines in quotes of course because we invented them; it baffles
me beyond belief that anyone pursuing entry into an integrity business, being a
trusted custodian of client assets , would discredit everything else they might
do by engaging in such obscenely blatant plagiarism.)

And why would someone do something so farcical as to plagiarize a mission statement? Because of course their
primary mission is to raise capital into Goldmoneys success. And even if there are Glint employees that share our
mission, its a shame because we know that the mission of Glints initial Bay Street funders is to democratize
access to their cheap paper, through an overvalued RTO, as they falsely project themselves into our market
capitalization. But of course they have neither the capital or vision to attract such valuations, so they pitch their
poorly conceived copycat play to the Toronto Bay Street underbelly, not the world class shareholders that we, the
actual first gold payments and savings network with an actual mission, were able to attract.

The truth about Glint Pay is far less buzzworthy than their bold claims: Glints MasterCard is simply a prepaid
debit card using MasterCards External Pre-Authorization API a feature available to any prepaid issuer
including Goldmoney. Glint has neither invented anything nor engineered any new technology; its simply
pre-extending fiat-currency working capital into an account with MasterCard and then deceiving (using User
Experience and User Interface trickery) its customers, the investing public, and the press that it is gold rather
than local currency which is being spent.

At no point in time is gold being spent or received by the merchant, which at each point of sale is accepting
fiat currency which Glint must provide as final settlement through the MasterCard network. Therefore,
Glints client gold must first be sold to generate a positive fiat currency value which is used for settlement.

At Goldmoney, our full-reserve ethos and our companys founding mission is to never waver when it comes to
true physical ownership and full elimination of counterparty risk. That is why we solved this issue--the need to settle
the fiat currency debit emanating from the MasterCard network in fiat currency--by accelerating the physical
settlement cycle for vaulted precious metals but, importantly, placing the onus on the clients metal to generate
the settlement funds.

So how does Glint get around this first-principle? The answer is both troubling and disappointing, especially from
the perspective of a client of a precious metal custodian: Glint is encumbering its customer gold and introducing
material payment-in-transit counterparty risk while not disclosing this on its website or marketing
materials. Indeed, through rhetorical sleight-of-hand, they deliberately obscure this critical fact.

Each day, Glint sends its MasterCard issuer a spreadsheet with each customers card number and an accompanying
reservable balance. The formula used to establish a reservable balance is likely this: Daily Reservable Balance
= Client Gold Value in GBP * X% where X represents the amount to Glint is willing to extend vs. a clients Gold
value in GBP that day. For example: If Client A has 500 GBP in Gold value and Glint employs a 100% extendable
reserve philosophy, Glints spreadsheet to MasterCard that day would permit up to 500 GBP be spent in the clients
card that day.

Make no mistake about it: at this point, the clients gold has been encumbered and Glint must reserve the
clients gold (be short the gold value) against the fiat currency credit it has pre-extended to MasterCard. In
other words, when a client spends gold on the card, Glints fiat position gets debited first. Client gold is only
liquidated thereafter to satisfy that debit.

There are several structural and as I said philosophical issues with this process which is why we never went down
this route, but there are also significant potential security threat vectors. Let me provide just one:

Hacker A compromises a Glint clients MasterCard, gaining the ability to spend at POS or Online.
The Hacker proceeds to max out the card, creating various fiat currency debits, which must be settled by
liquidating client gold.
Even if the client finds out in time and alerts Glint, which in turn alerts MasterCard to the fraud, by virtue
of the fact that Glint uses External Authorization, there could be significant FX slippage which would need
to be unwound, even if MasterCard reimbursed Glint through the chargeback process which takes up to 180
The clients metal would be encumbered throughout this process preventing the ability to use it for
payments or sell it for currency.
Glints working capital would be encumbered as it had to resolve these issues by proving the fraud took
place to MasterCard.
If the client took longer to discover the fraud, the complexity of unwinding this mess would be exacerbated.

(This is just one threat vector I have disclosed. I have thought of two others which I prefer not to disclose as they
can potentially cause even greater harm to Glint.)

The underlying problem here is that Glint isnt some formidable financial institution with a strong balance sheet or
access to low cost funding. Glint is a startup, founded on March 25, 2015 which has, after 3 years, and nearly $5
million spent, just launched its first product in just one country: The UK. It is now for the first time onboarding
clients the position we were in in 2015. Based on a presentation they gave in July 2017, the company has no
more than one million pounds of capital at this moment meaning that, absent dangerous (and probably
fraudulent) leverage, managing any more than one million pounds of client gold would be mathematically

Given Glints shaky financial position, what appears to be a very high overhead, and little personal financial support
from its founders, the primary goal of all this recent, aggressive PR appears to be positioning the company for a new
capital raise which is in all likelihood urgently needed.

This contrast between what Glint says and the truth will be a recurring theme in this thought piece as I will show
how the integrity of at least one of the principals is questionable (between 2005-2010, Jason Cozens, Glint founder
and largest shareholder, operated a spoof site to which he registered under
routing genuine Goldmoney interest and traffic into his fledgling gold site Ultimately,
Goldmoney and its founder James Turk brought forward a legal compliant to Nominet the UK Official Registry of
domain names which ruled to transfer ownership of the domain to and that from my point of view,
the fact pattern appears to show an elaborate scheme to raise capital off the demonstrable, continuing success of

Poorly Conceived Counterparty Risk and Not Enough Disclosure on Glint MasterCard

As I will show in this section, Glints primary product is not what they represent it to be. Let us review a statement
from Glints website about how their card works:

This statement is nothing more than lie. Word trickery is employed to mislead customers and investors. Glints Card
is indeed a prepaid debit card with a MasterCard issuer. Their agreement with MasterCard most likely specifically
mentions it to be a Prepaid Debit contract. Glint is merely using the External Authorization feature available to all
prepaid debit card issuers including Goldmoney.

But as I have shown above, Glint is doing something rather dangerous by serving as the liquidity bridge between
two very different assets: fiat currency deposited with a MasterCard issuer, and physical gold in a vault. In the
process, Glint is sacrificing the most important aspect of gold ownership by encumbering its clients gold while
misleading them about what is truly taking place:

1. Glint encumbers the clients gold at the start of each day by limiting the potential spend on each card to
within the gold/GBP value.
2. The client spends money at Point of Sale using Glints working capital which was previously extended to
3. Glint must liquidate the clients encumbered gold to bridge the debit incurred in Glints working capital
balance with MasterCard.

That these three separate transactions take place simultaneously is due to a significant structural flaw in Glints
architecture overlooking material counterparty settlement delays which at scale will introduce non-linear risk. The
only reason the process can happen so fast is because Glint has already extended the funds to MasterCard which
means it had to be long fiat against the client gold it encumbers each day. Using physical gold, this would be
impossible, especially at scale, without suffering significant slippage that render the business model insolvent.

That these three transactions are married into one line-item on Glints software is another poor business decision,
misrepresenting whats taking place for one transaction: say, the instant spending of gold at Starbucks. In reality,
what has transpired here is the sale of gold by the client generating a fiat gain or loss which has be accounted for tax
purposes, and then using those fiat proceeds to pay for the debit incurred by MasterCard which Glint simply fronted
from its own working capital.

There is no resilient micro-service technology architecture to deliver landmark liquidity here thats just
hyperbole this is simply good old fashioned Herstatt Risk in settlement with false and misleading statements
wrapped around it: A great recipe for permanent loss of capital to client assets under custody.

It is truly mind boggling that purported proponents of physical gold ownership could overlook such an important
structural pillar, which leads to an un-scalable business model that requires Glint to maintain an equal amount of
fiat currency balance with MasterCard for each increase in metal weight owned by customers.

This would be the only technically feasible way to permit instant spending of physical gold which has to
be sold and settled first before it is converted to currency to settle a MasterCard debit. And if Glint is doing
things differently, say by maintaining a float with MasterCard that is not fully reserved against its client gold
position, and simply hoping to manage the various daily demand for spending, this would be far worst. It
would mean that Glint is misrepresenting the liquidity afforded by its Card to Clients and that, if a
combination of Clients sought to spend simultaneously, theyd be unable to once Glints working capital
balance at MasterCard was drawn.

So what is Glints plan? How will they ever scale and offer a product they claim allows for the instant
spending of gold via MasterCard when this is technically impossible? As T. Boone Pickens said, even a fool
with a plan is better off than a genius without a plan!

Before I continue on other troubling aspects about Glints history, its investors, and its founder, Id like to compare
how we at Goldmoney run our card operation which was indeed the first gold backed MasterCard launched in
2015 first under the name BitGold.

1. The clients gold is owned free and clear at a specific vault of their choosing with accompanying insurance.
At no point is client metal encumbered.
2. We, like all prepaid card issuers, maintain the same working capital balance account at MasterCard except
we extend a float amount in various currencies using our working capital. Generally, we keep that float at
around $2-3 million.
3. Clients are tasked with the responsibility to budget their spending-yes, we expect our clients to be
prudent-planning to either load their card, or, set up an auto-load feature when the card drops below a
certain fiat currency balance.
4. In order to fund the card-load, the client sells their unencumbered physical gold, generating a currency
credit through our gold exchange Aurum. This process can take as little as 10 minutes or at times 1-2 days
depending on the vault (Dubai for example takes longer to settle than London). But the critical factor here
from both a solvency and settlement risk perspective is that the metal is sold first and the money is
received second.
5. When the clients physical gold sale has settled, and only then, will we allow them to load their card with
the proceeds.
6. Using our patented and truly innovative physical gold settlement technology, this whole process can take as
little as 15 minutes at times. Thats because we spent years connecting 15 vaults around the world and
multiple bank parties who we signed on to specific settlement/collateral agreements. In general, it takes one
working day. To accelerate this timeline any further would require us to take on counterparty risk that we
are not prepared to take and which we know our clients and investors come to us to avoid.

This mode of operation is consistent with what I was taught to be the ethos of gold ownership. It means if we have
another 2008 style financial crisis, our clients wont be beholden to counterparty risk or unnecessary encumbrances
of their metal. This also means our clients metal is free to circulate in p2p payments at each vault using our
payments tools.

With Glints process, there is no clear and discernible line segregating the clients metal from the operating activity
of Glint. (I suspect this is also in violation of the true scope of license they have obtained from the FCA, who we
would expect to apply further scrutiny.) As a former distressed equity investor with a specialty in bankruptcy law, it
is my opinion that Glints operating procedure would introduce significant insolvency risk in an event like Brexit or
other plausible Value at Risk scenarios.

Moving past the debit card issues, which are significant, there are many questions surrounding the nature of Glints
gold ownership. It would seem, based on their own presentations to investors and an extremely vague customer
agreement, that they prefer to push clients into CFD type gold accounts where they are taking a paper position. They
call this Liquid Gold but they dont ever explain what is owned in this account. Recognizing this is different from
the Allocated account naturally implies that this account is not allocated. From being not allocated to a paper CFD
is not a big leap in the gold space; this we know from experience as the industry thrives on misleading people into
paper products. Therefore, while I do not have clear proof-they dont provide it-I suspect the grease in this poorly-
conceived externally authorized debit-card structure, is this Liquid Gold.

With a paper gold CFD, what Glint could do is essentially use the client fiat currency deposit into the Liquid Gold
account to fund the MasterCard working capital balance. That means the client would be long a synthetic gold
position against Glint, which is short the Gold position against Fiat currency (you cant make this stuff up ladies and
gentleman!). To protect itself, Glint might hedge the Gold/Fiat short in the futures or CFD markets, bringing on yet
another counterparty and fee-slippage. The only saving grace to Glint in this structure is that it could actually scale
by taking on more leverage and counterparty risk. Of course, without proper disclosure to clients or the FCA, this
would seem to further violate their business model and recent disclosures to the press.

To summarize this section, Glints primary service relies on user-interface trickery to misrepresent transactions as
spent gold (in violation of MasterCards own policies) which obscures significant counterparty risk. Meanwhile,
the gold itself may not even be physical or allocated contradicting the whole raison detre.

Every journalist at CNBC, FT, Independent, The Times etc. who wrote differently was hoodwinked by Glint
management and should consider whether investors who read these articles may open accounts at Glint and lose
money in the future.

False and Misleading Statements to Investors

Glint is making false and misleading statements to investors in violation of Securities Laws in the UK, Canada, and
the US. These include their claims for being the first gold-backed card and the first gold-backed financial
system. We sent a formal letter to GlintPay Ltd. on March 2016 (Yes, that long ago. Remember its taken them
nearly 3 years to launch a product) requesting they cease and desist from making these statements. While they sent
us back confirmation that these statements were removed, the PR events of recent days show the company continues
to operate in a manner that is not transparent enough to be a reliable, reputable, and trustworthy gold custodian.

We have put together a list of further troubling signs that speak to the virtue and integrity of one of the founders,
Jason Cozens, and whether he is suitable to run a gold custodian, safeguarding the savings of clients and investors.

1. Plagiarizing Intellectual Property Glint has a history of plagiarizing marketing terms created by myself
Josh Crumb, Stefan Wieler, James Turk and other Goldmoney thought leaders to the point where some of
their earlier investor decks and even today most of their marketing terms copy certain statements we coined
that where never before used in the gold industry verbatim. These include:
o Democratizing access to gold
o Re-introducing Gold as money
o Gold as currency
o Savings and Payments Platform
o Choice in Money Choice in Currency

2. Blatantly lying about being the first gold-backed MasterCard. We came out with a Gold-backed
MasterCard in 2015, first with BitGold, and then we came out with two cards made from physical gold and
o In another bizarre behavior fact pattern by Glint, for a few months, Glint was circulating
misleading decks to investors claiming they had a physical gold card (before they even
launched or had a working prototype) using an image of our physical gold card! This resulted
in us having to send them a formal letter to cease and desist and ensuring they remove our
gold card from their promotional documents.

3. While Ben Davies seems well-intentioned and genuine, the companys founder and largest shareholder
(Jason Cozens) has a history of being obsessed with Goldmoney, spreading false and misleading statements
about the state of his own business, misrepresenting the true state of progress and commercial status of his
business venture, and engaging in a lot of hyperbole and balderdash in pursuit of
personal profit. How he convinced someone like Davies to join as Co-founder while giving him such a
small personal stake is beyond me. Without Davies, I doubt any investor or client would think twice about
this company.

4. It has taken GlintPay Ltd. three years to launch a product which we launched almost three years ago. This
product appears to be limited to the UK only, and only available as a mobile app on the IOS app store. So
again, disproportionate hype and press focus (by the company) for what is basically a startup who launched
their product in a limited market and only now is seeking their first customer.
a. By comparison, had 30,000 + users in the private-beta even before we launched. And
we never got an FT or other major financial media piece written about us at that point! I know
first-hand how much energy and time is required to prepare multiple press articles with various
outlets under embargo/exclusive in the way Glint did last week. This was an insane amount of
attention the principals of Glint invested for possibly 3-4 weeks just to create this blitzkrieg of
hype and press around what is a small, poorly-capitalized company that just launched with its first
customer. This is extremely concerning; especially if indeed they are engaged in selling or
marketing securities to investors right now.

5. After being founded in early 2015, and being unable to raise any significant capital locally, Glint ultimately
was only able to raise any meaningful capital, in Toronto, by literally chasing our existing and prior
investors and our investment banks.

a. By Comparison, myself and Josh personally invested $3 million into BitGold as the first investors,
building a proof of concept with our hard-earned capital. Having founded the company in Toronto,
we accessed that capital market.

6. Certain principals at a Canadian investment bank, who at the time sought revenge on myself and Josh due
to a soured relationship, took Glint around Bay Street as a me-too play to Goldmoney Inc. In fact, the one
banker (now at Eight Capital) Jamieson Bondarenko for a while pitched institutions with a pair trade
proposing (clearly not knowing that a pair trade requires both instruments to be publicly traded) to short
Goldmoney and go long private units of Glint. Two years later that trade would have produced a 200%
loss, before accounting for stock-borrow fees, on the short and dead-money in the form of Glint Pay private

7. As I wrote in the introduction, James Turk asked me to write this piece because he believes the founder and
largest shareholder of Glint Pay, Jason Cozens, is not a suitable fiduciary of investors capital based on a
Nominet Decision in the UK citing Cozens unscrupulous tactics to register a domain name
( in order to re-route traffic/customers searching for Goldmoney to Cozens fledgling
competitor: Goldmadesimple.
a. - Search for Jason Cozens and read the
sketchy tactics he used at the time as well as his deceptive, misleading responses during this
Nominet process. Ultimately, he was found guilty of Abusive Registration tactics and the domain
name was transferred into the custody of Goldmoney.

8. I suspect Glint will soon try to tap Canadian Investors again and ultimately try an RTO as there are several
Canadian investors and hedge funds who are stuck and who, perhaps having missed out on
BitGold/Goldmoney, foolishly invested in Glint. These include for example Keith Nuemeuyer (who seems
to have a penchant for copying our ideas ala his new silver cubes which not only copied our gold-cube concept but the
packaging and even photographic treatments!), and Jamieson Bondarenko who based on a non-compete
and explicit communication by his previous firm to us, should have never even been allowed to invest in
Glint, let alone have a 0.75% stake.

9. Glint has burned through a lot of investor capital to launch one feature in one market using one narrow
application - $5mm CAD by my estimates. While its difficult to compare apples to apples here, I can
assure you that I wouldnt know how to waste so much capital for such little return.

10. Glint heavily promotes an FCA license without stating the specific regulated activity which may breach
FCA guidelines. In fact, it is actually an e-money license that restricts their activities and more importantly,
does not permit them to handle client money. (Glint is not regulated as a money-service-business nor for
any regulated activity which would enable them to pursue any sort of activity outside the UK.)

11. Ultimately, their narrow business model is simply not good enough to ever generate a sufficient return on
the capital they are destroying. I suspect they know that, and soon most of their investors will also see that
as well because Glint will require more and more capital to keep the lights turned on. Glint is the equivalent
of an area play aka closeology aka me-too in the junior mining space. Its designed to raise and
consume capital, not effectively compete through innovating a new market or concept.

12. Goldmoney is where it is today due to a confluence of serendipity, opportunistic M&A, and well-timed
technology and vision. We never once thought that we would achieve so much so fast. Our venture began
by investing our own capital. We were and very much remain passionate about this venture being
something we wanted to do for the rest of our lives. Any competitor thinking they can outspend us to grow
to our size is going to waste a lot of money and achieve very little in the way of a valuable business IMHO.
As my opening quote from Aristotle notes, even the quickest runner can never overtake the slowest, if all
they are doing is trying to reach the point we previously occupied. Thus far, I have seen nothing from Glint
which isnt a copy of innovations we brought to the market.

13. While I have no proof, I wonder if the recent flurry of newspaper articles about Glint is the result of
purchased PR. The only other conclusion would be that the writers have zero journalistic integrity or rigor
for basic due diligence because we created this product (as just one feature of our business) 3+ years ago.

14. After speaking to my contacts at MasterCard, there are other troubling questions about Glint:
a. Here is what one individual said verbatim: They dont mention an issuer or have the appropriate
disclaimers on their website in breach of all Mastercard and issuer regulation.

This was a difficult piece to write. I remember how disappointed I was when several writers published negative
articles about BitGold warning investors against our company. I dont want to come across as someone who is
against entrepreneurship, innovation, and competition. I am not. I actually enjoy competition very much. But I think
Glint Pay has made some poor decisions and should reflect on whether its business model is sustainable and whether
it should be marketing itself as a gold savings platform while introducing significant counterparty risk and non-
physical metal.

Their sources of capital and focus on aggressive PR before having a product lead me to believe they are not
concentrating enough on the important responsibility that comes from being a fiduciary of others hard-earned
savings. That concerns me, especially coupled with the fact pattern of previous behavior by Glints founding
shareholder Jason Cozens in relation to James Turk and Goldmoney.

As I have shown in this piece, over the years we have heard about Glint and have had direct engagement with them
so I knew the company was launching and had not really cared much either way. Had I not seen all this nonsense
being written up with false and misleading statements, Id have not written this note, but I think investors should
know the truth and tread carefully.
I also believe that their next move might be to try and hawk this to Canadian investors via an RTO, capitalizing on
the hard work, intellectual property and value we created at Goldmoney.

In conclusion, it is my opinion that honesty, integrity and truth should guide innovation in the gold space, not
trickery and manipulation. To this end, Glint has failed on the primary objective of broadening access to
physical gold.

Roy Sebag
Beijing, China