ICO Analysis: Change

Change Bank CEO Kristjan Kangro opens the Change whitepaper with a note on the failure of the world’s oldest bank. One would think that would be the end of the missive – the oldest bank in the world has failed, banking itself has failed more than once, cryptocurrency is intended to make such situations impossible. While there are moral reasons to object to the invasive tentacles of the legacy banking establishment, from an investment perspective, it bears looking into. We’re decades away from cryptocurrency having entered the common lexicon such that on-boarding outfits like Coinbase, Monaco, or Change Bank won’t be necessary, and even then, it’s likely they’ll still find rent in the system somewhere.

For the author, the great thing about Change Bank is that they don’t take a lot of explaining. They intend to be a cryptocurrency bank, complete with fiat withdrawals and deposits as well as a debit card. Their focus is in the spending of monies and extracting fees from such activities. We should, nevertheless, briefly go over what they do have on offer, since it’s not a direct copy of any other project, but perhaps not as exciting as some might have first thought.

  • Will allow deposit of major cryptocurrencies and ERC20 tokens.
  • Pays a 0.05% dividend in network token for every purchase made with account.

Change began as a Fintech solution in Singapore, and now they officially consider themselves established in Singapore and Estonia, which is quickly pushing to become the crypto capital of the globe.

The rubber meets the road for Change in the revenue model. They rely on the establishment of Third Party Service Provider (TPSP) contracts relating to economic activity generated by Change Bank members.

Change Token

20% of what Change Bank members spend with such merchants is returned to the network, and from this, 83% is redistributed among token holders. The payments will apparently be made in Ethereum, to the Change Bank users account, on a monthly basis. This bit makes the author weary, since anytime there is a delay, there is an opportunity for malfeasance. Additionally, Change Bank itself is going to kickback 0.5% of its share of revenues from Mastercard proper, distributed over the entirety of the token holders. This could be a problem if a proper vesting schedule on any withheld-from-the-public coins is not established. They say that if 1 million users were to spend an average of $1000 per month through the Mastercard Debit card, then the annual revenue to token holders would be around $60 million.

The issue with Mastercard, of course, is their long history of flip-flopping on cryptocurrencies. There could be problems down the road that are unforseeable regarding this particular firm, but others seem to be working with them without problems.

Change will not force you to spend Change tokens when you’re shopping, but Change tokens will be used for any other transaction on the platform. This might not make much sense at first, but break the users of Change down into groups: token holders/investors and users. The users will have the least, if any, interaction with Change tokens. Their primary source of them will be in rebates, and their primary use of them will be exchanging for more currency to spend.

So who needs the Change tokens besides the Change platform?

Change Marketplace

The value of the Change token will actually be generated by the associated financial marketplace. Change identifies a core problem of banking conglomerates being that they bundle together inferior services, when instead they could offer the best services from the best providers, or leave it up to the market – which is the approach that Change is taking. Insurance providers, portfolio managers, the whole range of financial services will be able to integrate with Change Bank. They give an example of how this might work, with a supposed user having invested in a rental condo somewhere remote, and how this investment was done through a platform that integrated with the Change marketplace. We can see outfits like Liquid Asset Token wanting to integrate and provide access to Change Bank users, so we consider this open-ended marketplace of financial offerings to be a double-edged sword: on the one hand it has the potential to make a lot of money, on the other it sounds like a scammer’s paradise.

Nevertheless, even scammers would be forced to kick back to the network, and they would have to buy tokens in order to get started. As Change themselves say, their value is in re-bundling the best services from disparate sources – but not doing so directly. Instead, allow the service providers to have direct access to the clients who might benefit from them, and simply collect small fees on their take.

So more than anything, what Change has to do in order to succeed is get quick, massive adoption. A huge number of users makes the platform more attractive for the service providers who will, in the end, create the actual value for the token. Unfortunately, its only difference from Monaco is that it gives a smaller reward in tokens and has an extendable application programming interface. Its only difference from TenX is that its extendable API is probably extremely inferior to the Comit.network. We should think that integrating on top of Comit.network instead of re-building the wheel would be a smarter move, but we can’t tell people how to start their businesses. What we can do is suggest that while there will be a lot of hype around Change, just like all the others that attempt to bring crypto to the masses, in a broader scope we can already identify enough weaknesses to see that it may not stand the test of time by comparison.

At present, Change has only three partnerships for their financial marketplace: Smartly, the current operation of Change co-founder Artur Luhaäär; danabijak, a Singapore-based P2P lending company; and Bit of Property, an Estonian start-up that wants to facilitate real estate investments (similar in scope to LAToken or Propy). It would be much better if any of these were well-established firms, but none of them truly are. If we were going to get really excited, we’d have to see integration with at least one household name.

Change Distribution

We find here the problem with Change. Only 40% of the total token supply is entering the public domain.

The 200,000 ETH worth of Change coins issued in this initial sale covers 40% worth of all Change coins. 15% would be distributed out to the community over time as rewards for R&D and bounties. 10% is allocated to early investors & backers and future partnerships. 15% is reserved for the current team and most importantly, the future team members’ motivation packages. The final 20% will be held by Change, under scrutiny of the community, to reach future sustainability through network revenue distributions.

Change Bank itself is taking 35% of the tokens, and therefore all of the revenue sharing mentioned above is cut by that amount – these revenues actually go back to the bank.

Change Team

CEO Kristjan Kangro formerly was the CFO at Expara Financial, “Singapore’s pioneer and leader in venture capital, incubation, entrepreneurship, VC and innovation trainings, mentorship and advisory work.” He previously worked on a Dutch-Estonian appointments application called SwingBy as a business manager. His experience is limited, but as is the experience of most of the cryptosphere and the rest of the team.

We can attribute the scope of Kangro’s project to his youthful exuberance, we suppose, but we can’t get away from this point without noting that a very successful, established business leader has voiced support for Change. While we don’t normally take into account the words “big names,” we do have respect for those who’ve made it in the times before it was so incredibly easy to get into business and make money. Thus, the statement of former DHL CEO Roger Crook carries a bit of weight, as regards the team behind Change:

I’m backing this project because I think that it’s got an extremely good future. I mean, it’s the team behind it, Kristjan the founder, are exceptional people. They’re smart, they’re young, they’re energetic, they’ve been extremely well educated, and they’ve got so much drive, so much passion, to make this a success. I have no doubt that this business is going to thrive and grow global over the coming years. So for me it’s extremely exciting to be just a little part of it by backing it and supporting the team.

Well, Mr. Crook, the author wishes he could share in your lack of doubt, but we’ll take your word for it that the people are solid. Everyone has to start somewhere.

The team are also honest. According to a source from the Hacked community, their response to the question of what differentiates them from Monaco and TenX can be paraphrased as follows:

The main differentiator is the marketplace, we do agree TenX and Monaco have a head start – but that is not necessarily a good thing. It means they are poised to step over a lot of initial problems in the space- and have to exhaust resources to solve them and we can learn from some of their mistakes with regards to the card aspect. However with regards to the marketplace aspects, if they do want to head into this direction then they would be behind us. To be honest this is a large space and there will be enough for all of us.

All of these are fair points that we must consider. However, while their offering of a marketplace API will be more friendly to businesses actually getting started, the whitelabeling and other aspects of the Comit.Network should not be underestimated. However, just like they say in the above paraphrasing, there is plenty of meat to go around. It is a mistake to view the crypto space with a “Highlander”-like philosophy – there can certainly be more than one.

The Verdict

We find that we agree with Crypto Judgement’s assessment of Change as having “high credibility,” however do not stop reading here (see last bit of this article). We think they have designed an intriguing product and that they are more likely to deliver than not. We see the fundamental drag on their success being the arduous process of establishing partnerships and gathering marketplace participants in order to build the functional value of the token.


  • Service providers that would most benefit from the marketplace will have legal hurdles to get around, at least some, as regards existing contracts. This will be a complexity far greater than the team appear to recognize. We have to pick off 3 points for the hard slog of building the marketplace. Token value will not significantly increase until that marketplace is established, at least in terms of real value – speculation will be there. (-3)
  • A serious distribution problem. 35% left to their trusted hands? 60% total protected from market forces? -2
  • Change has a massive task in establishing its marketplace and user base. We see this as a bigger task than they probably do, which means the team may not be prepared. In terms of short-term effect on price, this is neutral. -0

Growth Potential

  • (Realism of concept and its effect on token value.) With massive caveats regarding their actual gathering of users and market participants, we say this thing is well-designed and can produce a lot of revenue for both token holders and Change itself. A goal of one million users in 2 years seems reasonable to expect, but the users will only increase once the marketplace is fully established and enticing. +4
  • On the advisory team, they have three people with wide-ranging connections that will help build the momentum and hype around the ICO: Roger Crook, Leslie Goh from Microsoft (who works as a financial services lead there), and David Moscowitz from Indorse. We think in terms of buying at ICO and selling at market, their involvement is going to produce favorable results. +3.5
  • One of the few ICOs where the company will actually share its revenue (although, as we found, not as much as it appears) with investors instead of expecting them to get their money from the market itself. Undeniably attractive to investors, and therefore another big plus. +1.5


We can’t get higher than a 4/10 on Change at the moment, in terms of long-term performance, due to a few things we discovered in our investigation. For actual ICO acquisition and market performance, though, we can see results that will somewhat mirror the performance of Mona.co. Thus, on the short side we’re going to lend 2 extra points, in the belief that they will actually yield results for short traders, but probably be lackluster at best for long-term investors who want to collect dividend payments.

Investment Details

The ICO will begin at 5AM EST (US) on September 16th. The total contributed Ether will be 200,000, with a maximum of 50,000 collected during pre-sale at a rate of 650 Change Tokens (CAG) per Ether. Regular sale price will be 500 CAG per Ether contributed. They say they will deliver the tokens within a week after the sale closes, but also reserve the right to be late.

We foresee that the delivery of Change coins from the Smart Contract will occur one week after the sale has concluded, but we reserve the right to delay the delivery up to four weeks after the sale closed.

Interestingly, although they list one of the time/dates in Singaporean, they are not allowing investors from the US, Singapore, or Estonia. The ICO is being conducted by Lion Capital OÜ & Lion Capital Foundation OÜ, which is based in Estonia. This makes the ban on Estonian residents very, very confusing, and raises a bit of a red flag we can’t end the article without flying.

Be sure to take official directions on investing from https://change-bank.com/ico/ – do not send money anywhere without being sure it is the correct address for the smart contract. Do not let Fear Of Missing Out cost you capital.


Website: http://phm.link

P. H. Madore has covered the cryptocurrency beat over the course of hundreds of articles for Hacked's sister site, CryptoCoinsNews, as well as some of her competitors. He is a major contributing developer to the Woodcoin project, and has made technical contributions on a number of other cryptocurrency projects. In spare time, he recently began a more personalized, weekly newsletter at http://ico.phm.link