Recap of the Wall Street Silver Twitter Space Discussion on Kinesis and Allocated Bullion Exchange (ABX) (2024)

The first 2 hours and 43 minutes of the space were dedicated to Wall Street Silver and the outstanding investigative reporting by Jon Little of The Pickaxe and The Happy Hawaiian as well as commentary from many others. For those that missed this story, listen to the space, check out the articles at The Pickaxe1 and read through the lengthy thread below. TL;DR: Jim Lewis is actually James Morrison, a convicted criminal. He used Wall Street Silver as a vehicle to enrich himself while scamming almost everyone else involved.

2:43:00: Bob Coleman opens the topic of due diligence for precious metals dealers and storage facilities.

2:44:25: The conversation turns to Kinesis. We’ll go over the highlights below.

2:45:00: Apparently Tom Coughling of Kinesis was supposed to join the space but did not. Bob raises questions about the $53,000 “donation” from Kinesis to Wall Street Silver. Bob suggests that recipients of sponsorships and those that promote products and services with referral links should be doing proper due diligence.

2:46:30: Jim Forsythe responds and states that his non-profit, Citizens for Sound Money, has done extensive due diligence on Kinesis.

2:47:15: Jim suggests that Bob’s company, Idaho Armored Vaults, has a similar user agreement to that of Kinessis. Bob refutes this claim at 2:49:15.

2:49:45: Bob highlights what he sees as serious problems with Kinesis’ limitation of liability in their user agreement.

2:50:17: Bob mentions Allocated Bullion Exchange’s financial statements and their negative net assets of more than $10 million. Jim interrupts Bob (2:50:44), apparently confusing ABX’s financial statements with the incomplete June, 2022, bullion audit released by Kinesis.

2:51:43: Jim: “We demanded something be put in place so it doesn’t happen again [an incomplete audit], and we are eagerly awaiting the next audit.”

A biannual audit would have been due on December 23, 2022, at the latest.

2:52:20: Bob redirects the conversation back to ABX’s financial statements and emphasizes the significance of the Disclaimer of Opinion for both 2020 and 2021. Bob suggests that this is a material fact that should have been disclosed by anyone promoting Kinesis.

2:53:19: Bob points out that the Kinesis user agreement contains a clause stating “the user has complete knowledge and understanding of the software code”. Bob: “That’s a pretty bold statement to agree to!”

We agree, especially since it seems like even Kinesis doesn’t know how it works. They are confused about whether tokens can be burned or not on Stellar-based blockchains. It also took them nearly four years, until late January 2023, to publish an article on how their blockchain works.

Thomas Coughlin: “if they do that, that redemption burns the KAU or KAG”

2:53:50: Jim says “[Crypto Informer] hasn’t done any due diligence on any other system”.

What about this due diligence? Or this, or this?

2:53:55: Jim: “In fact, when people ask him about other systems, he blocks them.”

We’re glad Jim brought this up because we saved receipts. Yes, we block some people for spamming or posting repeated comments that lack any substance. In this case, Kinesis’ own employees repeatedly spammed a similar message in a short period of time that appeared to have little or no substance.

What was their point? That this company is going out of business? That it’s very small? What wrong doing were they alleging? It wasn’t clear. They were asked for clarification, but they never replied. Twitter Direct Message and the comment section is still open for everyone who can refrain from spamming.

Derek is one of the Kinesis forum administrators who keeps posting false information about Kinesis’ audits. An honest analysis of Kinesis’ audits indicates that they are nothing like what Derek claims (see the section after the ABX financial statements).

Crypto Informer @cryptoinformer0

Is this the "a lie repeated often enough becomes truth" strategy from #KinesisMoney? There is no audit of all the gold and silver supposedly backing $KAU and $KAG since late 2020. Look at the last audit indeed - 37% of the gold and 13% of the silver was not audited

2:14 PM ∙ Feb 2, 2023

2:59:34: Jim is unhappy about the existence of this Twitter Space. Jim is also unhappy because he has to waste so much time defending Kinesis.

It’s not clear why, Tom Coughlin has been advocating for a public “debate” for some time now. Why is it Jim’s job, rather than Kinesis’ job to defend Kinesis? This isn’t clear either.

We fully acknowledged that it is possible to calculate the figures Kinesis wants considered as the ciruclation. It’s actually not complicated or confusing at all. It is difficult to get the blockchain data needed to make the calculation. Calculating the circulation simply requires ignoring the balance of several addresses. Why didn’t they publish this earlier? It also means that even if their circulation calculation is correct, their blockchain explorer is still providing incorrect information.

Four years into their project is awfully late in the game to just be figuring out how to calculate the circulation of the tokens and to be creating a working block explorer. It is really a remarkable claim that tens of thousands of people have invested over $100 million into Kinesis without ever wanting to check the token circulation. Some kind of sound money that is!

3:00:27: Jim exits the space.

3:03:24: Bob opines that it’s a little unorthodox for Europeans to deposit money to a Cayman Islands cryptocurrency exchange by way of Indonesia.

Crypto Informer @cryptoinformer0

Is this a joke?Europeans send money to Indonesia in order to make deposits to #KinesisMoney?And Kinesis is opening a Lithuanian cryptocurrency exchange?🚨🚨🚨🚨🚨🚨🚨🚩🚩🚩🚩🚩🚩🚩forum.kinesis.money/threads/when-e…

6:24 PM ∙ Jan 27, 2023

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3:08:02: Bob discusses digital gold generally and the potentially fatal flaw of a platform that requires constant trading volumes to succeed.

3:07:20: Liberty Lyss brings attention to Thomas Coughlin and Kinesis’ supporters’ insistence that we must be doxxed in order to get answers to our questions.

We thank Liberty Lyss for her support.

3:09:53: James Andersen warns against using any type of precious metals storage program where customers would be unsecured creditors in the event of bankruptcy. He also suggests that it can be risky to store precious metals with the same company that sells them.

3:12:00: Bob discusses how negative market conditions can result in legitimate businesses becoming Ponzi schemes. Bob also reiterates the need to go through user agreements with a fine-tooth comb.