LSX built on blockchain technology. Blockchain provides data storage and transaction execution decentralization that make this process transparent and auditable for all involved entities. All user accounts and transactions history are stored in different locationsa and any changes in the database require reaching a concensus. Blockchain keeps all user accounts secure even if ledger is publicly available. Trasparency and privacy: 1. Transaction is processed by users that are directly involved in a transaction 2. Each transaction results to a cryptographically signed confirmation 3. Transaction metadata is available only for entities that are authorized to access it.
Can investors from the US or Singapore buy LST?
Yes, LST is not intended to constitute a security in any jurisdiction.
The crowdsale terms and conditions and any other documents relating to or in connection with the LST and the crowdsale shall not be construed as a solicitation for investment and do not pertain in any way to an offering of securities in any jurisdiction
Does LST give me shares in the company?
No, LST is not connected with shares in the company or any other method of distributing the company’s profits. LST is fuel for the LSX and can be used only in the LSX.
LST is not intended to constitute a security in any jurisdiction.
Of course, LST will be traded on the third-party cryptocurrencies exchanges, but the company cannot guarantee or regulate the price of the LST. We have an expectation for the LST price, as outlined in our business plan. The price of the LST will depend on our business activities and the speculative interest of the market.
Are you regulated by the government?
Lendingstar Marketplace is self-regulated. We are required to take steps to do history checks and verify the identity of both investors and small business owners on our platform. We also conform with the Anti-Money Laundering policies set out by international regulatory bodies. As we roll out to new countries, we expect some governments to impose regulations.
For LSX, a suitable license does not exist yet. Therefore, we are negotiating with the MAS about various options for licensing a similar business. Before the end of the development process of the LSX, all documents and processes will meet the requirements of the MAS.
Can you explain ETRA in one sentence?
You call yourselves LendingStar, but you don’t lend.
In mid 2016 we pivoted from lending to invoice buying. We decided to make invoice buying the underlying asset, as it is a safer investment for retail investors. Invoice buying requires little financial knowledge on the part of the investor.
Why is invoice buying safer for investors on the LendingStar marketplace than P2P lending?
There are a few ways to answer this question.
1. Risk. When you loan money, the risk of default is calculated against the small business. Many small businesses have a short trading history, and for the ones that do hold financial records, verifying these records is time consuming, so the interest charge will be high. A better proposition is crowd buying invoices. The risk of buying an invoice is calculated against a multinational company with a better credit history and who is compelled to pay the invoice. We look for A grade invoices to large, well-known multinationals that pose small default risk. The firms have a zero default rate—the equivalent of a government.
2. Ownership. Many invoice marketplaces claim that invoices are bought and sold, but rather invoices are loaned against. A loan is not as strong as ownership. Every country has laws that support the legal transfer of ownership of an invoice. An invoice is treated as an asset on the balance sheet and continues to be treated as such after ownership is transferred. In the past, legal transfer was expensive and time consuming. We created the Exchange Trade Receivables Agreement, or ETRA, to address this problem.
3. Collection. When an invoice is sold to an investor, the small business has no legal claim. The investor becomes the rightful owner. The funds are paid by the customer into the marketplace trust account and settled between the marketplace and investor. In a P2P lending, you are required to wait (and pray) for the individual to settle with you, as the platform takes no responsibility for collection.
What is the marketplace accelerator?
LendingStar plans to ensure liquidity by buying up to 30% of invoices listed by small business owners. The marketplace accelerator will stimulate trade, create interest among investors, and help get invoices fully funded. There is a direct relationship between the market accelerator and volume. If we deploy the full market accelerator, we can hit our volume targets. In 2017 we will do US$5M in projects. By the end of 2018 we will have funded US$380M.
Some other marketplaces have taken similar action to stimulate their marketplaces, including SoFi.
