Diamond Standard Coin Regulated OfferingDownload Offering Memo
Regulated, licensed and supervised by the Bermuda Monetary Authority
Internal audits by Deloitte
Every coin contains natural diamonds which in aggregate meet or exceed the Diamond Standard established in the IPO
Diamonds purchased via transparent bidding and statistical sampling
Diamonds graded and/or reconfirmed by the Gemological Institute of America and International Gemological Institute
Terms of SaleCommodity Product with Utility Token Offering
Every Diamond Standard Coin (the “Coin”) is equal. It is a physical commodity composed of a statistically calibrated set of natural diamonds and an embedded digital blockchain token which is used to transact it. The contents of every Coin is mathematically engineered to have the same geological scarcity.
When you purchase this product, you first receive the key to the token and subsequently we will deliver the physical diamond commodity, the Coin. Your funds are held in escrow under regulatory supervision until the diamonds are selected via an automated market making process, then independently inspected and delivered.
We will deliver your Diamond Standard Coin to your address in the US, or you can have it delivered to an approved US custodian. You can also choose to self-custody the token key, or deliver the token key to a digital custodian.
This ongoing Offering is for new Coins which conform to the Diamond Standard — a public index of the geological content that was established by a regulator supervised Initial Public Offering in 2021.
All coins are equivalent
To make Diamond Standard Coins equivalent, the diamonds embedded inside are purchased through a statistical sampling process, by automatically bidding on global diamond inventories, to purchase a statistically valid sample of thousands of natural diamonds from around the world. Every purchase must comprise a statistically valid sample of the primary diamond characteristics, such as carat weight, color, and clarity, for natural white diamond between 0.18 carats to 0.75 carats, and match the statistical characteristics of the original IPO sample. The bidding is transparent to all vendors. Diamond Standard may also purchase diamonds directly from consumers, and then have them independently graded.
The gemological details of every diamond acquired through this bidding process is made permanently public, and the diamonds are distributed into Coins fairly by an optimization system. The optimizer ensures that each Coin contains an equivalent share of gemological scarcity. Every Coin approximates the natural yield curve of the range of diamonds in the Earth’s crust, which does not change over time.
Diamonds are purchased from hundreds of competing vendors through the Diamond Standard Exchange. It uses automated market making and transparent bidding, to force a consistent price discovery mechanism for all diamonds in the range. To maintain the systems and cover the cost of delivering the diamonds globally, the Diamond Standard Exchange charges a 3.5% fee.
All diamonds contained in a Diamond Standard Coin are independently graded by gemological labs, and all larger diamonds are reinspected by a competing lab. Grading and confirmation services are provided by the GIA (Gemological Institute of America) and the IGI (International Gemological Institute). Diamond Standard Coins are assembled inside the IGI labs, and then optically audited.
All coins are equivalent
To make Diamond Standard Coins equivalent, the diamonds embedded inside are purchased through a statistical sampling process, by automatically bidding on global diamond inventories, to purchase a statistically valid sample of thousands of natural diamonds from around the world. Every purchase must comprise a statistically valid sample of the primary diamond characteristics, such as carat weight, color, and clarity, for natural white diamond between 0.18 carats to 0.75 carats, and match the statistical characteristics of the original IPO sample. The bidding is transparent to all vendors. Diamond Standard may also purchase diamonds directly from consumers, and then have them independently graded.
The gemological details of every diamond acquired through this bidding process is made permanently public, and the diamonds are distributed into Coins fairly by an optimization system. The optimizer ensures that each Coin contains an equivalent share of gemological scarcity. Every Coin approximates the natural yield curve of the range of diamonds in the Earth’s crust, which does not change over time.
Diamonds are purchased from hundreds of competing vendors through the Diamond Standard Exchange. It uses automated market making and transparent bidding, to force a consistent price discovery mechanism for all diamonds in the range. To maintain the systems and cover the cost of delivering the diamonds globally, the Diamond Standard Exchange charges a 3.5% fee.
All diamonds contained in a Diamond Standard Coin are independently graded by gemological labs, and all larger diamonds are reinspected by a competing lab. Grading and confirmation services are provided by the GIA (Gemological Institute of America) and the IGI (International Gemological Institute). Diamond Standard Coins are assembled inside the IGI labs, and then optically audited.
Every coin contains an equivalent set of natural diamonds
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Transparency
The contents and grading report for every Coin are permanently public. Every Diamond Standard Coin contains an optimized allocation from a large sample of diamonds, which is statistically equivalent to the gemological distribution contained in the initial sample. The original diamonds were purchased with proceeds from the initial public offering, and acquired through the same competitive price discovery process.
Therefore, every Coin ever made will contain the same gemological scarcity of diamonds as those Coins issued in the Initial Offering, regardless of the cost of the diamonds when the Coin is assembled. Coins are designed to always hold the standard gemological content and therefore represent equivalent value.
The daily market price (or fix) of the Diamond Standard Coin is not set by Diamond Standard. It is established by buyers and sellers in the secondary market through exchange trading—just like gold. Diamond Standard sells new Coins at a small premium or discount to the market-determined fix, and then purchases new statistical samples of diamonds. Coin owners may offer to sell their Coin at the market price through an exchange, or to any buyer at a mutually agreed price.
New Coins sold by Diamond Standard are not transactable until they are produced and delivered to the buyer or their custodian. During this time, the value may go up or down.
The token inside the Diamond Standard Coin is compliant with the ERC-20 token standard, and can be listed and then traded on a variety of cryptocurrency and digital asset exchanges. Diamond Standard will provide a list of venues on its website, when available.
To trade your Diamond Standard Coin on an exchange, it must be held by an approved physical custodian.
How is this a commodity?
The Diamond Standard Coin is physical and designed to be fungible. The production of the Coin and the offering is regulator supervised by the Bermuda Monetary Authority and internally audited by Deloitte. Every Coin is designed to be geologically equivalent, and intended to trade on the market at the same price, just like a standardized gold coin. The Coin is always delivered to the owner or their custodian. You are not purchasing a share of a pool or a futures contract, you are purchasing a delivered commodity containing a set of diamonds that is statistically similar to all others.
How is this a token?
Each Diamond Standard Coin contains a statistically calibrated, public set of diamonds, and a wireless computer chip. This chip enables real time electronic auditing and instant authentication, and also stores a blockchain token—a BCC (Bitcarbon Coin). The key to this token, which is created upon purchase and known only to the owner or their custodian, is a receipt, for delivery on demand, of your specific Diamond Standard Coin.
The owner of the token is the legal owner of the Coin. If you sell your token, you have sold the ownership of your Coin. If you encumber the token, by taking a loan for example, you encumber the Coin, with a lien recorded on the public blockchain. The token owner can always take possession of their specific, unencumbered Coin by contacting their custodian or custody administrator. If the ownership has changed, the recipient may be subject to local KYC and AML requirements.
How is it made?
There is no stockpile of diamonds or tokens. Every time it creates BCC tokens, Diamond Standard must purchase a statistically valid sample of natural diamonds, using transparent bidding on the Diamond Standard Exchange. The detailed characteristics of every diamond, and the aggregate characteristics of every sample are always made public, for anyone to verify.
We bid on diamonds through an automated market-making process, to force the price discovery of the entire range of diamonds, and then purchase a broad sample. An optimizer system distributes the large number of diamonds into fair sets, to be embedded into the Diamond Standard Coins. The optimizer has parameters that force every Coin to have a similar number of diamonds and total carat weight, and visually similar distribution. So every Coin is beautiful and equivalent, but they are not identical.
Inside an independent gemological lab, each Coin is analyzed by an enrollment station, that optically and electronically inspects the Coin, the chip and the diamonds. If all aspects of the Coin are verified, in one simultaneous moment, the Coin is optically imaged, the token is electronically burned into the chip, and the token is enrolled on the public blockchain. Tokens can only be minted through an enrollment station, upon the presentation of a Coin containing a valid set of diamonds, proven to have come from a statistically valid sample acquired through transparent bidding.
Only once the Coin is received by the owner or their custodian, does the token becomes transactable. There is only ever one token per commodity, and the token itself is indivisible. No BCC tokens are issued to our founders, team, advisors or anyone else. Owners of Diamond Standard Coins always own 100% of the existing BCC tokens.
The BCC token supply is forever constrained by the supply of natural diamonds and our capacity to source and assemble them.
$15 per additional coin (USA only)
$10 per additional coin
How do I use a BCC token?
Your BCC token and the Diamond Standard Coin are inseparable. The BCC is initially delivered as a fungible ERC-20 token, so you can store the keys in any ERC-20 compatible wallet. The token key is the receipt for your specific Diamond Standard Coin. To transact the BCC token, the physical commodity, the Diamond Standard Coin, must have been electronically and optically authenticated by an approved custodian—that’s called proof-of-asset. To transact the token remotely, the Coin must be held by the custodian, who guarantees that the Coin is deliverable.
Diamond Standard charges no fees for any transactions you make after the initial sale of the Coin. Custodians and exchanges may charge you fees, or pay you income, for their services.
If you send your Diamond Standard Coin to an approved custodian, they use the Diamond Standard App to authenticate the Coin as a proof of receipt. Until it is received by the custodian, your Coin is insured by the gemological lab, or the shipping company.
Your custodian can authenticate and then store the Coin in their vault, or optionally they will store your Coin inside a Diamond Standard Smart Cabinet. This Smart Cabinet audits and authenticates the Coin in real time. In a Smart Cabinet or not, while your Coin is held by an approved custodian, that proof-of-asset enables you to use your token key to transact your Coin, whether to sell it privately or on an exchange, to take a loan against your Coin, or to attach it to a smart contract.
Your physical custodian has no ability to electronically transact your Coin, unless they also possess the token key. They cannot falsify the audit of a Coin held in a Smart Cabinet — the Coin itself replies to encryption-challenge queries.
You can also entrust your token key to a digital custodian, generally different from your physical custodian, or store your token off-line for safe keeping. An administrator, like Diamond Standard Trust, can arrange and manage both the third-party physical and digital custody for you.
In-Hand Transactions:
When you take possession of your Diamond Standard Coin, you cannot list it on an exchange, take out a loan, or attach the Coin to a smart contract. There’s no proof-of-asset for your counter-parties.
But you can still sell your Diamond Standard Coin to a buyer face-to-face. Buyer and seller use the Diamond Standard mobile app, anywhere in the world, to authenticate the Diamond Standard Coin and transact on the blockchain, at the market price or any agreed value. The app communicates with the Coin’s wireless computer chip, to transact the embedded token on the public blockchain. The chip inside the Coin signs the blockchain transaction.
Your smartphones establish proof-of-asset. The app requires an optical authentication of the Coin, and both buyer and seller must install the app, and connect it to a digital wallet containing ethereum (for gas).
Future proof
The Diamond Standard Coin, BCC token, and proof-of-asset protocol is designed to be compatible with many blockchain platforms. If the Diamond Standard Coin is held by an approved custodian, and there is no blockchain recorded lien, the BCC token will soon be able to be moved (or hop) to a variety of public or private blockchains, and be attached to any smart contract on those platforms. There are no fees to Diamond Standard for using this feature or the proof-of-asset protocol.
The BCC token and the Diamond Standard Coin together will form a universal asset, that will be portable across blockchains, and able to asset-back activities on those chains, with a market-traded, deliverable, physical commodity, with a common market value. All the Diamond Standard Coins and their BCC tokens form a decentralized reserve owned by everyone who owns a Coin.
KYC/AML & Regulatory Oversight
Purchasers do not need to be accredited investors, but must agree to the Terms of Sale agreement, and submit information for a KYC/AML review and subsequently be approved upon such review. Diamond Standard is internally audited by Deloitte, with a regulatory license from the Bermuda Monetary Authority.
The Diamond Standard technology and processes are designed to be regulatory-compliant, acceptable for institutional investors, and capable of supporting securities offerings, such as CFTC regulated futures and options, and SEC regulated Trusts and ETF funds, and their global equivalents. The Diamond Standard Coin, as a physical commodity, is not regulated by the U.S. SEC, or the U.S. CFTC.
Delivery
Upon KYC/AML approval, agreeing to the Terms of Sale, and payment (by USD or ETH), purchasers will receive blockchain proof that their token keys are in line to be enrolled as Diamond Standard Coins are produced. Once the Coin is enrolled, purchasers will receive the Bitcarbon BCC ERC-20 token keys in the ethereum wallet address of their choice—their own, or their digital custodian's.
The BCC token is not transactable until the Diamond Standard Coin is delivered to the owner or their physical custodian.
For the current Offering, the Diamond Standard Coin will only be delivered in the USA, although in the future, production and delivery will be offered in more countries. Purchasers may select delivery to a Diamond Standard approved custodian of their choice, or to their U.S. office or residence address. We do not deliver to P.O. Boxes, and if you use a credit or debit card, we only deliver to an approved custodian, or to the address provided by the financial institution that issued your card. Signature with positive identification is required, and other restrictions may be imposed by the carrier, which are beyond the control of Diamond Standard.
Shipping fees are below, and for deliveries to all US states where it is required, sales tax will be collected. For delivery to a Delaware custodian, there is no state sales tax.
If you use an approved physical custodian, the first year custodial fees will be collected with sale. Diamond Standard is never a custodian of any buyer's Coins or BCC tokens, and never has access to your keys. As a service to purchasers, our affiliate, Diamond Standard Trust, does administer custody of Coins and token keys held at licensed custodians.
Recovering Lost or Stolen Token BCC Token Keys
If you lose your BCC token key, as long as you have your physical Coin and ownership is not disputed, you can recover it. To recover a BCC token key, an independent gemological lab will simultaneously authenticate the Coin and destroy the token in the Diamond Standard enrollment station. Then they will dissolve the Coin and remove the diamonds, and reassemble the diamonds into a new Diamond Standard Coin. This Coin will be enrolled on the blockchain with a new BCC token, which refers to the diamond provenance data of the original BCC token.
Diamond Standard cannot recover a token without the Coin being delivered to the independent gemological lab for authentication, destruction and recreation. We cannot simply reset your key or recover a password.
Fees
Token transaction fees(Zero to Diamond Standard)
After delivery of the token and Coin, Diamond Standard charges no fees to authenticate, buy, sell, exchange, trade, transfer, change blockchains, or attach your token to smart contracts. Address-changing and smart contract transactions consume gas (i.e. ETH), depending on the platform. That gas does not go to Diamond Standard, it goes to the miners supporting ethereum.
Exchange fees(Zero to Diamond Standard)
Exchange fees are set by the individual exchange providers. BCC owners are not limited to any one exchange. Coins must be custodian-held to be listed on an exchange, in order for the proof-of-asset protocol to work.
App & Auditing Fees(Zero)
Diamond Standard charges no fees for use of the mobile app, web app, integrated audit, proof-of-asset, or API services.
Custody Fee
You may choose to take delivery yourself, or use an approved custodian for the Diamond Standard Coin and/or the BCC Token. Fees are determined by each custodian.
Physical Delivery Fees
Insured U.S. Delivery to a buyer is $50.00 for the first Coin, plus $15 per additional Coin, and will incur state sales tax where applicable.
Insured delivery to an approved custodian in Delaware is $25.00 for the first Coin and $10.00 per additional Coin, because we are shipping in bulk.
Other
This offering does not constitute an offer to sell, a solicitation of an offer to buy, or a recommendation of any security. Furthermore, nothing in this Offering or website is intended to provide tax, legal, or investment advice and nothing in this website should be construed as a recommendation to buy, sell, or hold any investment or security or to engage in any investment strategy or transaction. Diamond Standard does not represent that the products or services discussed in this Offering or website are suitable for any particular investor. You are solely responsible for determining whether any investment, investment strategy, or related transaction is appropriate for you based on your personal investment objectives, financial circumstances and risk tolerance. You should consult your business advisor, attorney, or tax and accounting advisor regarding your specific business, legal or tax situation.
"Diamond Standard" and the Diamond Standard logo and symbol are registered trademarks of Diamond Standard Holdings Ltd. The Diamond Standard Coin is protected by U.S. Patents, and Patents Pending.
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