DESCRIPTION OF BUSINESS
UpBots is a Swiss trading platform that will allow the trading of crypto, DeFi, Forex, commodities, and traditional market assets. It includes social copy-trading tools, training resources, a bot creator, and a marketplace. UBbots is not an exchange; it connects to exchanges via APIs which allow its users to execute trades on their respective accounts through UpBots. The global cryptocurrency market is expected to grow with a CAGR of 32% from 2019 to 2024. The global algorithmic trading market size is expected to be worth $18.8 billion by 2024, with a CAGR of 11.1% between 2019 and 2024. As such, this is a growing market, and trading bots are more than likely to be in demand in the near future.
There is no functional MVP for UpBots available at the time of writing; therefore, we can not review the functionalities of this project yet. UpBots (UBXT) tokens are ERC-20 compliant, issued on the Ethereum blockchain, and use the Ethereum consensus mechanism of proof-of-work (PoW).
The founding team has a good mix of experience in the financial services industry, economics/trading experience, and some experience in crypto assets. The team lacks members with a legal background to guide the project through the legal uncertainty of the cryptocurrency industry. There are no publicly known legal or controversial projects that have involved the team members in the past.
Upbots GmbH is registered in a Swiss canton called Zug, under the company number 1421429, also known as Crypto Valley. The number of startups found at Crypto Valley Labs jumped from 15 to 100 within one year. Overall, UpBots seems to be very well connected and backed by major industry players like Alameda Research, a well-known quantitative trading firm. The legal risks that we have identified for this project mainly revolve around KYC & AML.
UpBots is raising funds through the sale of their native token, UBXT, valued at 0.01$ per token. The whitepaper says that there will be a maximum token limit; however, a specific number has not been mentioned. The UBXT token will be used for payments, referral commissions, and various incentives. Not providing information about the number of tokens to be created or the funds that the team intends to raise could be considered a severe underestimation of the judgement and analysis capacity of potential investors.
Our researchers gave UpBots a final rating of 51.35%. The breakdown of this rating is available at the end of this report.
PRODUCT & COMPANY DESCRIPTION
UpBots is developed by Solfin Consulting – an umbrella technology company that includes a trading signal channel (4c-Trading) and the online training platform BrainFeed (in creation).
Upbots aims to provide a unified and easy to use trading experience for inexperienced and experienced traders alike. This experience is designed to start with cryptocurrencies and eventually expand to cover traditional financial instruments, such as Forex, stocks, and derivatives. The platform is encompassed by a set of tools and automation features that cover market analysis, manual trading bots, social copy-trading, and risk management tools with a mobile app in development.
UpBots aims to complete the following objectives by the end of 2021:
- Complete their Private and Public token sales.
- Launch their MVP by Q320 (delayed).
- Launch V.1 of their platform.
- Launch their mobile application.
- Launch their social copy-trading integration.
- Launch their Forex integration.
The project’s mission, as stated, is ‘to become an all-in-one trading solution for every asset available with tools that serve both beginner and professional traders’.
The project has two particular robust features that could steer them towards success.
- All-in-one mentality: Encompassing crypto, Forex, DeFi, and commodities in one platform, as well as the features mentioned above, makes UpBots an attractive venue for trading in case it is successfully developed.
- Strong partnerships: UpBots is well-connected and supported by successful entities and players in the market.
MARKET CONDITIONS AND COMPETITION
The future of the cryptocurrency market looks promising with opportunities in the peer-to-peer payment, remittance, e-commerce, and media/entertainment industries. The global cryptocurrency market is expected to grow with a CAGR of 32% from 2019 to 2024.
The global algorithmic trading market size is expected to be worth $18.8 billion by 2024, with a CAGR of 11.1% estimated between 2019 and 2024. As such, this is a growing market, and trading bots that help traders automate their trades will continue to be in demand. IUpBots aims to incorporate Forex, stocks and commodities trading on their platform, which means that it will address an increasingly growing market. Forex markets had a daily turnover of $6.6 trillion in 2019, up from $5.1 trillion in 2016. The total value of the Forex industry increased from $1.934 quadrillion dollars in 2016 to $2.409 quadrillion in 2019.
UpBots competes with a great number of players, considering the wide range of markets it aims to compete on.
The company provides a summary of feature comparisons between themselves and their competitors Haasbot, Coinigy, 3commas, Cryptohopper, eToro, Cryptotrader, in their whitepaper (p11). According to the chart below, UpBots’ trading platforms offers three distinct features that none of its competitors is currently offering: DEX (decentralised exchange) trading, being Blockchain-based, and staking.
What makes UpBots different from its competitors is that, unlike the majority of the other players concentrating in a specific market, UpBots aims to serve almost all the trading markets simultaneously. This differentiator can make UpBots attractive for many users but also result in tremendous pressure while competing with every member of the trading industries.
Technically, the tools, automation, integration, as well as UX/UI features that Upbots promises can be delivered using traditional technologies. Many online brokers (Etrade, Ameritrade) and traditional brokers (Charles Schwab, etc.) offer the same range of tools and services using traditional IT for stocks, bonds, mutual funds, and derivatives. UpBots could do the same, but, since it is a blockchain-oriented company, it intends to leverage this technology to provide additional functionalities.
UpBots (UBXT) tokens are ERC-20 compliant, issued on the Ethereum platform, and use the Ethereum consensus mechanism of proof-of-work (PoW). Once Ethereum switches over to a proof-of-stake consensus mechanism (PoS), believed to be safer, we can expect UBXT to switch over as well, since being in the financial services and the trading sector will likely drive UpBots towards a more secure solution. Additionally, the switch to PoS will make Ethereum much more scalable and versatile.
There is a mention in the whitepaper of a 3rd party audit of the smart contract code (p49), the name of the auditor is not available. The paper states that “All organization and implementation processes connected to a successful UpBots token sale have been prepared following industry best practices, supported and audited by our partners.”
The project has a detailed road map in its whitepaper (p38). It is, however, difficult to know from it which milestones have been carried out, and which ones are yet to be met. There is no graphical differentiation between completed projects and uncompleted ones.
Some interesting findings about the core team members are:
Benjamin Duval, CEO: Co-founded 4C trading (there for three years), Solfin Consulting (there for two years), and has business experience in marketing from previous jobs in Belgium.
Julien Quertain, Co-founder/CFO: Credited with experience in investments, portfolio management, and credit risks businesses for seven years.
Ramzi Habib, CTO: Senior full stack developer, cited as an expert in mining, blockchain and interface development.
Angelique Massolo, COO: Worked as a business process consultant for six years.
Some interesting findings about the core advising members are:
The project website or documents do not provide any details about the advisors’ experience, nor do they provide links to their bios or professional experience. Searching for their names on digital platforms returns no significant results.
However, Theodore Galariotis was found on LinkedIn, which shows that he has about 14 years of professional experience at a management level in the pharmaceutical industry.
We were also able to find Philip De Ridder on LinkedIn. He has an IT background, with many management and advisory roles throughout his career. He advertises himself as an advisor for UpBots on his LinkedIn. However, he does not have any posts about the project on this social network.
General Comments on the Team & Advisors
The founding team has a good mix of experience in the financial services industry, economics/trading experience, as well as expertise in crypto assets. The marketing team has consulting and digital business experience. Overall, UpBots has a relatively young team with a good Academic background (mostly educated in Europe with experience in US schools).
The team, however, lacks members with a legal background that can guide the project through the legal uncertainty of the cryptocurrency industry.
There are no publicly known legal or controversial projects that the team members have been involved with.
LEGAL AND COMPLIANCE SPECIFICS
The token issue company Upbots GmbH is registered under the company number 1421429, in Switzerland and their offices reside at c/o Domanda Verwaltungs GmbH, Grafenaustrasse, 5, Zug 6302,CH. It was incorporated on 14th of January 2020.
CEO, Benjamin Duval’s LinkedIn profile states that SolfinConsulting is the holding company of 4C-Trading, UpBots and Brainfeed. This is also implied in the whitepaper (“UpBots GmbH, a company operated under Solfin consulting”). Solfin Consulting is registered under the company number 0711667521, in Brussels, Belgium and their offices reside at Rue de l’Ancienne, Gare 2b, Lasne, 1380, Belgium.
On the website’s bottom left corner, along with the company’s contact details, there is a mention of another company, Domanda Verawaltungs Gmbh. This company seems to merely provide domicile services to UpBots. This company is presented under the “company address” of UpBots, with no other apparent involvement in the company’s management or shareholding.
Domanda Verawaltungs seems to provide “administration of companies, granting of domicile and related services”). Our investigators called and talked with a local registry employee, who explained that Domanda Verawaltungs only provides domicile services to UpBots.
Upbots GmbH is registered in a Swiss canton called Zug, also known as Crypto Valley. Crypto Valley is an ecosystem centered in and around the Swiss canton of Zug with active connections to international centers of blockchain innovation. It is increasingly compared to Silicon Valley for finances and has produced stars such as Ethereum. The number of startups at Crypto Valley Labs jumped from 15 to 100 within one year.
Partnerships and Legal Agreements
UpBots’ list of interconnected exchanges.
UpBots claim in their whitepaper (p6) to have access to ten strategic ecosystem partners through Solfin consulting –its parent company.
Based on the UpBots whitepaper and website, 4c-trading and Brainfeed (still in creation), part of the Solfin ecosystem, will be integrated to the UpBots platform. 4c-trading constitutes a crypto trading-signal channel with existing bots and a record in crypto trading consulting. Brainfeed will be an online training platform. Additionally, the company states that it is an official partner with both FTX (an exchange) and IDEX (a decentralised exchange).
As a trading platform, UpBots needs to have partnerships with exchanges that will connect to its platform through APIs, enabling users to access said exchanges. Listed Exchange partners on the website include FTX, Binance, DEX, Huobi, bybit, Kraken, Okex, and Alameda Research.
The company also lists ‘Key Partners’ in its whitepaper (pg 44). This list includes Priority Token (an advisor for the ICO), Cogaris, Froriep (a Swiss Law firm), Faculty Capital (an algorithmic trading firm that deploys low-latency algorithms) and Sum & Substance. 12% of the funds raised during the token sale will be allocated to form and maintain UpBots’ partnerships.
Overall, UpBots seem to be well-networked and backed by major industry players.
UpBots cites major players as industry partners.
The project does not indicate any of the team members/advisors as having a legal role(s) or experience. The project allocates 5% of the funds raised during the token sale to its legal department.
Froriep, a Swiss law firm with expertise in many fields, among them DLT & Fintech, is listed as one of the key partners on the UpBots website. On the firm’s website we can see that Froriep consults clients on Initial Token Offerings and Security Token Offerings.
KYC & AML
At the moment, there is no KYC/AML procedure available for token purchases. The registration process only involves entering one’s name, email address and Telegram handle, after which the team intends to contact the registrant.
The FAQ session of the project website indicates that KYC procedure would be “announced soon.” The roadmap (whitepaper, p39) mentions a KYC & AML partnership, but we could not find more details.
UBXT is a Utility token, and is neither asset-backed nor promises periodic dividends. The tokens are mainly used to pay fees incurred as a result of using the UpBots platform. To back this up, Upbots GmbH has received a no-action letter from FINMA, the Swiss Financial Market Supervisory Authority, recognizing that the UBXT token is a payment token under the proposed structure outlined in the letter, and is not a security token.
UpBots is a well-structured project, backed by big industry players and developed by a company with a proven history of building projects from the ground up. This does not mean that the project is free from any legal risks. The risks that we have identified mainly revolve around KYC & AML:
- Lack of clear KYC & AML procedure for token sale investors.
- UpBots will enable its users to trade on Decentralised Exchanges. These sites are non-custodian and permissionless peer-to-peer exchanges and most of them do not perform KYC & AML checks.
UpBots is raising funds through the sale of their native token, UBXT, valued at 0.01$ per token. The whitepaper says that there will be a maximum token limit, but the specific number of tokens to be issued or circulated is not mentioned.
The project doesn’t mention at any point what will happen to unsold tokens. Its institutional sale and private sales have been 100% sold out, as per the website. In the whitepaper, it is stated that 15% of the net income of the platform will be used to burn tokens in Q1 2021, 10% in Q1 2022, 5% in Q1 2023, and 2% in Q1 2024. Fiat payments will also be allowed and will be automatically converted into the funds’ UBXT equivalent. These funds will be locked during the time of the subscription. The implication, reasons, and process for this are not spelt in the whitepaper. In particular, it is worrying that the number of tokens to be issued is not known.
The project whitepaper indicates that tokens for the team will be locked for up to two years, after which they will be released at a rate of 25% every six months. The tokens for advisors will also be locked for one year, and 50% will be released every six months.
Use of Funds
The following is the proposed use of the funds collected through token sales:
SOCIAL MEDIA AND VIRALITY
The project has a little over 4.3k followers on Twitter. This is a good enough following to create buzz around the project’s products.
The project’s LinkedIn page has a little over 1.1k followers. This is a manageable number to get the project messages across on the platform. The page. however, requires more frequent activity, as it has practically no engagements.
On Facebook, Upbots has an active page with less than 3,000 followers. The engagement rate is, however, very low.
Upbots has an active community of over 7.3k members on Telegram, with an average of 700+ online at any given time. There is constant interaction between members and the project’s leadership.
The project has its own YouTube channel with only 32 subscribers.
Asides from a review from a channel with 1.1k followers, there are no visible channels talking about the project on YouTube.
Bounty Campaign and Referral Scheme
The white paper (p29) mentions referrals as an essential part of the ecosystem and has a paragraph dedicated to them. Referrers will earn UBXT tokens in exchange from bringing in users. This system is ingrained in the heritage of Solfin consulting (the project’s parent company), as it has been used in all of its other product launches.
The company has allocated 1 per cent of its funds to a bounty campaign. There is, however, no mention of social media or other forms of viral bounty programs in any of the project’s marketing materials. In comparison with other allocations, the bounty allocation seems inadequate.
UpBots has received reviews in the following sites specialised in ICO reviews:
Best Coin List: 4.8/10
Everything you see in this report is the aggregate result of an extensive research process carried out by a distributed team of researchers and crypto enthusiasts around the world. The process consists of 60 questions divided into three phases. Researchers are called to answer these questions about a project, while providing links or screenshots as evidence to support their answers. For every answer, they also provide a rating from zero to five. The average of their ratings is detailed below.
Our researchers gave UpBots a final rating of 51.35%.
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