REPORT: INITIATIVE Q: Wild Assumptions, Marketing Hocus Pocus, And Using Hi-Jacked Cryptocurrency Lingo As A Sales Pitch

Several months ago, Saar Wilf, the co-founder, and chairman of five technology start-ups1 launched the marketing campaign for Initiative Q, a new payment network that would use a private currency—the Q token.2

The Initiative Q website makes substantial claims about its planned payment network and private currency. Initiative Q’s website states that it will offer:

  • Lower transaction costs through a streamlined, digital process and better fraud protection;
  • Advanced security measures, including fingerprint, voice and face recognition; multi-factor authentication; and advanced artificial intelligence models;
  • 1-click payments;
  • Enhanced customer protection through internal regulations and buyer feedback to prevent sellers from misrepresenting their products and pricing;
  • Easy online reversibility and efficient dispute resolution;
  • Optimal credit allocation by using richer information and more advanced models to correctly assign credit to lenders;
  • Parental control through sub-accounts that allow parents to control children’s expenses;
  • Assistance with the billions of people who currently don’t have access to financial services.3

The soundness of the claims, however, cannot be assessed, as the payment network will only be put into place if the marketing campaign is successful.

Initiative Q’s Marketing Campaign Has Drawn Comparison to Pyramid Schemes

Initiative Q is conducting an aggressive “member recruitment campaign” on social media. Initiative Q gives tokens persons who join, and more tokens are given to those who invite their friends to join.4

Initiative Q, however, is not a pyramid scheme.5 There is no cost to join Initiative Q, so it does not collect money from new members and distribute it to earlier members.

To quell any concerns, Initiative Q includes a section on its “Frequently Asked Questions” page that is titled “Is this a pyramid or MLM (multi-level marketing) scheme?”.6

Differences Between Initiative Q and Cryptocurrencies

A ‘Q’ token is a private currency and not a cryptocurrency. The tokens will be carefully managed through a monetary body that will assure that the money supply matches current economic activity, so the value of the tokens will remain stable and not fluctuate wildly.7

In addition, Initiative Q will maintain a central ledger and not rely on blockchain technology. Q tokens will also not need the vast amount of energy that is needed to create many of the existing cryptocurrencies.8

Initiative Q Will Not Distribute 20% of the Tokens

The website states that the two trillion Qs distributed as follows:

  • 80% are assigned to buyers, sellers, agents, contributors and to incentivize growth-supporting activities within the Q network;
  • 10% are assigned to the Initiative Q payment company for the purpose of funding development;
  • 10% are assigned to the Q monetary committee monetary reserves, which will be gradually converted to other currencies and financial assets to allow any Q member to easily convert to other currencies if needed. In addition, monetary committee members will be compensated according to industry standards.9

The company will use 10% of the tokens for the undefined purpose of “funding development,” and a portion of another 10% of the tokens will be used to compensate monetary committee members “according to industry standards”.10

Members Unlikely to End Their Relationship With Their Credit Card Companies

Initiative Q states that it is realistic to expect its network to “overtake credit cards”.11 This is based on the assumption that members will be willing to end their existing relationship with credit card companies because they have been compensated with future currency for joining Initiative Q.

As a result, a new payment network will be established that will be widely adopted by buyers and sellers.

It is uncertain if members who signed up in a marketing campaign that promises to give away “future currency,” will later forgo their relationship with long-established credit card companies.

Excessive Valuation of the Tokens

Initiative Q did not release a white paper. Its website contains a large quantity of information on the project, but, at times, it reads like copy written for a marketing campaign with excessively optimistic claims.

The valuation of the tokens falls in this category. The $2 trillion valuation for the Q tokens is based on several assumptions. The world’s annual economic activity is $10 trillion, and cryptocurrencies reached a peak value of $1 trillion. Therefore, the total future value of Qs could reach a few trillion dollars.12

The website does not explain how Initiative Q would react to the measures that existing payments service companies would take to maintain their commanding market share.

Fees for Services Provided by Initiative Q

There will be fees charged for the services provided by Initiative Q. The website states that “agents (will) compete with each other to manage member accounts (buyers or sellers), and receive a small fee for transactions they process.

These may not be the only fees changes to members, as the website does not explicitly state that no future fees will be imposed on members. This is troubling, as a member with Q tokens of sizable value, will likely pay the additional fees imposed by the company to access those tokens.

The information provided in this report is for informational purposes only. It should not be considered legal or financial advice. You should consult with an attorney, financial advisor, or other professional to determine what may be best for your individual needs.


This report was prepared by Trifin Roule.

For nearly two decades, Mr. Roule provided for the U.S. government legal analysis of anti-money laundering, counterproliferation financing and counterterrorist financing laws and regulations dozens of jurisdictions, and international standards, as detailed through intergovernmental bodies (e.g. Financial Action Task Force (FATF)), and financial institutions (e.g. banks’ financial intelligence units and compliance offices).

In addition, Mr. Roule has provided in-depth analysis of digital asset accounting, auditing, customer due diligence, exchange, licensing, mining, initial coin offering (ICO), private key storage, and record-keeping practices and regulations.

Mr. Roule is a former Assistant Editor at the Journal of Money Laundering Control, a peer-reviewed journal that provides detailed analysis and insight on the latest issues in the law, regulation and control of money laundering and related matters. Mr. Roule has published dozens of articles on anti-money laundering, and counterterrorist financing laws and regulations.

Trifin Roule is the Publisher of our new division, Abacus Legal, and his and his team’s reports will be free to read for the next 45 days. After that time they will be dubbed premium content and require a subscription.


  1. “Saar Wilf: Executive Profile & Biography,” Bloomberg, https://www.bloomberg.com/research/stocks/private/person.asp?personId=787446&privcapId=319521716&previous (accessed 8 November 2018).
  2. The economic and monetary models were developed with Economist Lawrence White, a professor of monetary theory and policy at George Mason University, and a senior scholar of the Cato Institute Center for Monetary and Financial Alternatives. “About,” Initiative Q, https://initiativeq.com/ (accessed 8 November 2018); and “Lawrence H. White,” Faculty and Staff, Department of Economics, Georg Mason University, https://economics.gmu.edu/people/lwhite11 (accessed 8 November 2018).
  3. “Frequently Asked Questions: What advantages does the Q payment network offer?,” Initiative Q, https://initiativeq.com/ (accessed 8 November 2018).
  4. “Frequently Asked Questions: Joining Initiative Q,” Initiative Q, https://initiativeq.com/ (accessed 8 November 2018).
  5. Frank Chung, “What is Initiative Q? Payment network insists it’s not a ‘pyramid scheme’,” news.com.au, 30 October 2018, https://www.news.com.au/finance/money/investing/what-is-initiative-q-payment-network-insists-its-not-a-pyramid-scheme/news-story/193102b9fbb5c35d6365f7f34226908f
  6. “Frequently Asked Questions: Is this a pyramid or MLM scheme?,” Initiative Q, https://initiativeq.com/ (accessed 8 November 2018).
  7. “Frequently Asked Questions: How is this different from Bitcoin and cryptocurrency? ” Initiative Q, https://initiativeq.com/ (accessed 8 November 2018).
    https://initiativeq.com/
  8. “Frequently Asked Questions: How is this different from Bitcoin and cryptocurrency? ” Initiative Q, https://initiativeq.com/ (accessed 8 November 2018).
    https://initiativeq.com/
  9. “Frequently Asked Questions: How many Qs are there? Who holds them? Initiative Q, https://initiativeq.com/ (accessed 8 November 2018).
  10. “Frequently Asked Questions: How many Qs are there? Who holds them? Initiative Q, https://initiativeq.com/ (accessed 8 November 2018).
  11. “Frequently Asked Questions: What is your estimate of the Q value based on?” Initiative Q, https://initiativeq.com/ (accessed 8 November 2018).
  12. “Frequently Asked Questions: What is your estimate of the Q value based on?” Initiative Q, https://initiativeq.com/ (accessed 8 November 2018).