Physical Redemption - Experience and Thoughts

Physical redemption and backing of gold and silver are attractive features of Kinesis and were part of my decision to join the platform. While redemption is not my intended use for the platform, I did want to go through the process just to learn the ropes, should redemption become necessary. As such, here it my experience:

1. November 1, 2024: Navigated to Settings and then Redemption on the Kinesis.money website and entered the required details. Received an automatic confirmation of redemption request including "A member of the Kinesis Operations Team will be in contact with you..."
2. November 1, 2024: Received email "... Please provide the address you wish to have your bullion delivered to so we can arrange a delivery quote. We would also like to point out the fees associated with doing a redemption are XXX KAG + 0.45%, $100 processing fee, $TBA shipping and handling fee.
3. November 2, 2024: Received email "...We will provide the shipping fee to you after received the cost from vaulting provider..."
4. November 2, 2024: Inquired and received response regarding format (2 X 100 oz bars silver, no other options).
5. November 5, 2024: Received confirmation of fees: - 200.90 KAG (200 KAG + 0.45%), - US$100 processing fee, and - US$200 shipping and handling fee.
6. November 5, 2024: Redemption was processed and shipping label was created.
7. November 11, 2024: Shipment transferred to FedEx.
8. November 12, 2024: Shipment received.

With silver at $32.90/oz, the fees total $327.90 or $1.64/oz (5.0% over spot). This is not a terrible premium but one can find dealers selling at a lower premium (premium here including shipping).

Overall, I can say that I am very satisified with the redemption process. I made a suggestion to add other format options for redemption, such as 1 oz rounds/bars, at a higher premium. The response was "The minimum redemption silver bar size is 100oz." It does not appear that there is interest in providing other formats.

 

[Lozion]

Physical redemption and backing of gold and silver are attractive features of Kinesis and were part of my decision to join the platform. While redemption is not my intended use for the platform, I did want to go through the process just to learn the ropes, should redemption become necessary. As such, here it my experience:

1. November 1, 2024: Navigated to Settings and then Redemption on the Kinesis.money website and entered the required details. Received an automatic confirmation of redemption request including "A member of the Kinesis Operations Team will be in contact with you..."
2. November 1, 2024: Received email "... Please provide the address you wish to have your bullion delivered to so we can arrange a delivery quote. We would also like to point out the fees associated with doing a redemption are XXX KAG + 0.45%, $100 processing fee, $TBA shipping and handling fee.
3. November 2, 2024: Received email "...We will provide the shipping fee to you after received the cost from vaulting provider..."
4. November 2, 2024: Inquired and received response regarding format (2 X 100 oz bars silver, no other options).
5. November 5, 2024: Received confirmation of fees: - 200.90 KAG (200 KAG + 0.45%), - US$100 processing fee, and - US$200 shipping and handling fee.
6. November 5, 2024: Redemption was processed and shipping label was created.
7. November 11, 2024: Shipment transferred to FedEx.
8. November 12, 2024: Shipment received.

With silver at $32.90/oz, the fees total $327.90 or $1.64/oz (5.0% over spot). This is not a terrible premium but one can find dealers selling at a lower premium (premium here including shipping).

Overall, I can say that I am very satisified with the redemption process. I made a suggestion to add other format options for redemption, such as 1 oz rounds/bars, at a higher premium. The response was "The minimum redemption silver bar size is 100oz." It does not appear that there is interest in providing other formats.

"The minimum redemption silver bar size is 100oz?"

What if your order is more then the minimum? Say I want to redeem 250oz for example. The minimum quota 2x100oz is respected so what of the 50oz part?

 

[Pablo]

"The minimum redemption silver bar size is 100oz?"

What if your order is more then the minimum? Say I want to redeem 250oz for example. The minimum quota 2x100oz is respected so what of the 50oz part?

I am not sure what would happen if you tried to redeem 250 KAG. Multiples of 100 KAG may be required.

 

[Lozion]

Nowhere have I found that precision on the site.
Maybe @Uchiki can clarify..

 

[Uchiki]

Overall, I can say that I am very satisified with the redemption process.

Good to see that the steps were expedited efficiently.
$100 processing fee and possibly also shipping/handling fee would add a lower % on larger quantity.

I made a suggestion to add other format options for redemption, such as 1 oz rounds/bars, at a higher premium. The response was "The minimum redemption silver bar size is 100oz." It does not appear that there is interest in providing other formats.

Need to bear in mind that redemption is removing from the allocated pool of metal for KAG in the example that you gave.
The majority of the weight in the vault is going to be 1000 oz bars, so that's likely to be the most available redemption size, provided that the redemption quantity is sufficient.
100oz bars are retained in the KAG mix for convenience for smaller redemptions.

Where rounds or smaller bars are desired, there's an option to exchange KAU/KAG for these from kinesisbullion.com.
This is more of a purchase arrangement than a redemption.
Admittedly, that service is currently only available in the US.

This excerpt from Vaultside episode 3 indicates that the Kinesis Mint will be expanding it's export destinations. It's probably a reasonable assumption that retail availability will follow these regional expansions.
At the moment, US and Asia are our two different places that we are exporting to and we are expanding into Europe ...
Then Latin America will follow.
Australia will follow. Central Asia and Africa definitely will follow, but it's a step by step gradual increase for us.

Say I want to redeem 250oz for example.

See excerpt from guide linked below.
The increments mirror the minting increments.


Step 3: ...

Note: Redemptions of gold and silver can only be made in increments of 100 KAU or 200 KAG.

https://support.kinesis.money/hc/en-gb/articles/12439302237085-How-to-redeem-physical-gold-and-silver-bullion

 

[Lozion]

This is new to me. If I have say 500 KAG I can only get 4x 100oz bars and not 5? Hmm.

 

[Pablo]

I did explore the Kinesis Bullion option. One could buy 100 1 oz rounds for:
1. $3,501 USD if paying by bank transfer, which is a 13.4% premium, or
2. $4038 USD worth of KAG (130.81 KAG), which is a 30% premium.

Neither option is particularly attractive. Only the second option is a true conversion of KAG to physical and that bears an exceptionally high premium. I thought it might be a mistake but the 100 oz bar costs 123 KAG so I think this is real.

 

[Lozion]

What! 23-30KAG to swap 100oz of silver you own for a K branded 100oz bar?

 

[Uchiki]

2. $4038 USD worth of KAG (130.81 KAG), which is a 30% premium.

This looks like a mistake to me.
I've reported it.

 

[Uchiki]

This is more of a purchase arrangement than a redemption.

Added this to my previous post.

 

[Lozion]

From the bullion store: Kinesis Branded 100oz bar: 3282$ or 123KAG via cryptoniq
Selling 100oz at the KMS now is: 3062$
23oz now is 705$
Total: 3767$
Difference is 484$ more if paid via KAG..

 

[Pablo]

This looks like a mistake to me.
I've reported it.

It appears that your report brought about change - thank you Uchiki! I checked today and this is what I see at the Kinesis Bullion:

 

[Uchiki]

It appears that your report brought about change - thank you Uchiki! I checked today and this is what I see at the Kinesis Bullion:

Yes, I also now see correct pricing for KAU and KAG.
Thanks for highlighting.

 

[Pablo]

My sister and brother-inlaw also are new to Kinesis and went through the redemption for 100 KAU. They had a similar (overall good) experience. It took a bit longer to receive the shipment but they also were not as attentive to the process. Interestingly, they received a 100 g Kinesis bar, whereas I received 2 100 oz generic Ag bars, per the pictures below.

 

[Lozion]

Oh thats interesting!