Karatbars Report Lays Bare Depth of Scam

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Karatbars, the quasi crypto-bank that was ordered to cease operations last November by German regulators, has had the nature of its supposed crimes laid bare in an in-depth report by anonymous sources.

The report, which hails from the CryptoVigilante scam-busting Telegram group, accuses the group of operating “what may be referred to as a pyramid, multi-level marketing (MLM), or Ponzi scheme”, claiming that the operators lied about the awarding of a banking license and partnerships, bringing into question the fate of the $100 million raised in a ICO in 2018.

Claims Not Backed up by Fact

Karatbars was founded by Harald Seiz, a former vacuum cleaner salesman, in 2011, with the promise of revolutionizing the global financial system. The report states that Seiz and other Karatbars officials made huge and varied claims regarding the plans for the company, including a Madagascan gold-mine backed cryptocurrency facilitated by bricks and mortar banks. However, eight years later, this has not seemingly been the case:

Karatbars’ official materials and public statements have repeatedly been found to include inconsistencies, inaccuracies, misrepresentations, falsehoods, and grandiose claims.

The Invisible Bank

Chief among the accusations is that a supposed Karatbars bank in Miami was nothing more than a serviced office and that no license was ever awarded, despite the company heavily trading on the supposition, with a search of public records revealing that “there were either no Miami-area operations, or Karatbars was in violation by non-paying taxes.”

Karatbars has also allegedly removed any pictorial or video evidence of the opening ceremony, which the report states was previously available on YouTube, among other locations.

The report also brings into question the compliance aspect of the company’s supposed banking operations, citing “questionable audit statements”, falsely reporting the amount of company stock available and also finding no evidence to back up Karatbars’ claim that it “currently or historically has had negotiations or a “cooperation agreement” with “Fort Knox” for the development of the “KaratGold Security House”.

Karatbars Still Operational

Karatbars was issued with a cease and desist notice in November last year by German regulators who accused the company of issuing KaratGoldCoin (KBC) without a license. However, with the website and the multi-level marketing aspect of the company still apparently operating, it seems that much still needs to be done to bring the company to account.