Crypto neobank KAST is facing community backlash after abandoning plans for a TGE and introducing KAST Pioneer Units (KPUs) as an alternative reward for early users. On Monday, November 2, the crypto neobank announced that it would end its Points program on November 30, with eligible balances converting into KPUs during the first week of December. Users who do not qualify will receive reward vouchers instead.
The announcement frustrated users who had accumulated points for months, particularly those who expected a token or equity-linked rewards following earlier communications from the company.
Earlier today, November 4, CEO Raagulan Pathy clarified in an email that KAST plans to allocate 120,000 options to a special-purpose vehicle (SPV) supporting the Pioneer Units program.
KAST Replaces Points With KPUs
Under the new arrangement, 6,250 KAST Points will convert into 1 KPU. For example, a user holding 100,000 points will receive 16 KPUs. The SPV will hold 120,000 options allocated from KAST's main company. However, KPU holders will not directly own these options or the underlying shares.
The units carry no ownership or voting rights and cannot be transferred, sold, or traded. Their notional economic value may increase or decrease, but KAST has not guaranteed any future payments. The company says qualifying events, including potential option buybacks, could allow the SPV to distribute payments to eligible holders. It also plans to introduce periodic cash-out opportunities.
Ineligible users will receive spending vouchers instead, with KAST providing additional details in December. US users will follow a separate program with its own eligibility requirements. Points earning will continue until November 30, and qualifying points earned by that date will count toward the final conversion. KAST also confirmed that cashback will continue under existing terms.
CEO Defends Decision to Avoid a Token Launch
In his clarification on X, Pathy argued that token launches often create uneven outcomes, allowing founders and investors to benefit from liquidity while community members face volatility and declining token prices.
Pathy maintained that avoiding a TGE keeps the company's team and investors aligned with its long-term success. He also revealed that he had never sold his KAST equity and had purchased shares from earlier investors.
In a Wednesday post, he claimed the controversy had not affected product usage, with customer assets under management continuing to grow since the original announcement.
Community Up In Arms Over Undelivered Promises
The announcement caused a ruckus among community members, spurring some to go so far as to destroy their KAST cards.
CEO Raagulan Pathy's explanation did not stop criticism from prominent community members. Crypto lawyer and Givner Law founder Ariel Givner described the development as a bait-and-switch. She argued that KAST previously encouraged users to accumulate points for a TGE while displaying indicative dollar valuations against their balances. She questioned why users should accept non-transferable units without ownership rights or guaranteed value.
Popular trader Cryo Palmer also challenged the 120,000-option allocation, asking what percentage of KAST's equity it represents and how its value compares with the earlier point valuations.
He questioned why KAST could not pursue a tokenized equity structure similar to Backpack's approach. Palmer also argued that repeated changes to the rewards program left users with far less than they expected.
However, Vidor Gencel, co-founder of Solflare, defended KAST's decision to avoid a token. He argued that KAST's revenue from fees and float amounted to approximately 2% of transaction volume, while points rewards reportedly reached as high as 8% of spending. In his view, promising a token was the mistake, not abandoning the launch. He nevertheless agreed that KAST must find a way to compensate users for the expectations it created.
Palmer countered that KAST repeatedly marketed points as cashback and used them to encourage spending, including purchases of expensive cards. Gencel later suggested that an equity-linked token with tradability and liquidity tied to company events could offer a middle ground. KAST CEO Raagulan Pathy responded to the exchange, describing this sentiment as “reading it properly.”
Can Pioneer Units Repair Broken Trust?
KAST says the Pioneer Units aim to connect community rewards to the company's long-term performance rather than launch another speculative token. However, the units are not actual equity, do not guarantee payments, and do not give holders direct ownership of company options.
The distinction matters because KAST previously explored converting points into tokenized equity or a similar instrument. In July 2026, the company said investors had approved a community equity allocation that it described as a near nine-figure pool after dilution across its cap table.
6250 KAST points per KPU pales in comparison to the lofty promises KAST made earlier, but users will have to wait for further clarification in December to know the actual value of their rewards.
Read More on SolanaFloor
Crypto Rallies Following Democrat Midterm Sweep
Binance Reveals How Hackers Used Fake Job Interviews and AI to Steal $6.3 Billion
$6.3B Drained From Binance. Why No Crash?
