KaratGold Coin (KBC) — Do we need a Multi Level Marketing scheme token?
The short answer is “NO” we don’t need more superfluous tokens.
However, the good folks behind Karatbars International respectfully disagree and launched an ICO to raise 72 MILLION US DOLLARS worth of KBC (and sometimes called KGC) tokens.
Source: KaratBank’s Whitepaper
It’s unclear exactly how much the project raised to date, but we know it was spearheaded by Harald Seiz, German born financial consultant commonly referred to as- guy in the room with the coolest pocket squares. You might remember him as the creator the Multi-Level-Marketing (Ponzi) scheme involving cards with pieces a gold attached to them and a Singapore based company called KaratBank.
This coincidentally pyramid-like structure explains how to recruit others to work, while you collect passive commission based income!
Multi-Level-Marketing ploy aside, lets get into the actual KaratGold Coin ERC-20 tokens and their formula for valuing their tokens:
According to their whitepaper:
“The KaratGold Coin is a blockchain-based cryptocurrency that is linked to physically deposited gold in the form of the so-called CashGold. A certain number of KaratGold Coins can be exchanged for the appropriate amount of CashGold at any time.”
What is CashGold?
CashGold are basically cards/notes containing 1–6 grams of gold on it. The concept of attaching gold to paper media, calling it an “international payment means..” then selling it for 43% over it’s fair market value isn’t necessarily a bad concept. Marketing schemes aside, buyers should simply be aware of what they’re purchasing and that the value of attaching gold to paper may not translate to actual asset appreciation.
If I buy tokens will I be able to actually exchange them for CashGold products?
Maybe, but probably not.
Further along in their whitepaper it’s explained:
“There is no guarantee that users can acquire sufficient KaratGold Coin for their usage within the KaratGold Coin Ecosystem and external platforms and neither is there a guarantee that users can cash out their KaratGold Coin via external platforms. Furthermore, every KaratGold Coin holder naturally carries the risk of volatile exchange rate fluctuations of the KaratGold Coin towards both other cryptocurrencies and Fiat money exchange rates.”
Meaning…
Although, the website claimed at one point to have it’s tokens “already listed” on YObit.net, and HitBTC (both listed months after that statement) they have yet to establish a fair-market-value relative to their (alleged) surplus of gold. This means, outside of spit-balling a “4%” figure in a video, Harald Seiz and his cronies haven’t established an actual parity value to exchange their tokens for GoldCash, in order to avoid the risk of incurring a loss in the exchange.
Ok, but at least KaratGold Coins are tethered to the value of CashGold in some way?
Another resounding NO. Detailed in on pg. 13, section 2.3.4 of their whitepaper it states:
“The KaratGold Coin is a speculative coin. Although the proceeds from the sale of the KaratGold Coin shall mainly
be used for the purchase of CashGold, the KaratGold Coin is not pegged to the purchased CashGold. Therefore, the
development of the value of the KaratGold Coin is not related to the CashGold. A total loss of the money invested
in the KaratGold Coin cannot be excluded.”
This basically identifies that whatever the value of their token becomes, it wont be related to the value of their gold products.
So if they aren’t pegged to ANY of their gold products including CashGold, how can these tokens have value?
This is where it gets a little more interesting:
In a video titled, “Next steps for KaratGold” (posted May 23, 2018) Mr. Seiz begins making bold(totally unfounded) claims regarding KBC coins.
What does he say and what are the facts?
- “KBC Coins are currently backed up coin with 4% gold. 120 kilo altogether stored in high security safe in next 2 weeks and will be certified by an international law firm.”
Mr. Seiz claims to have 1/12 of a metric of gold stashed just out of legal audit-able reach, but lets hold our breath that it will be here sooner or later…
- “A joint venture agreement has been signed between KaratGold Corporation and Gazelle Corporate Capital AG about the mine in Madagascar. 900 million was found and certified.”
As it turns out “Gazelle Corporate Capital AG” or GCC, is an exploratory mining and mineral venture for lime, limestone and marble minerals, NOT GOLD and has no published association with any KaratGold/Bank entity. I would presume his undisclosed “venture agreement” is also fabricated Also, the mine referred to is Fort Dauhpin and it’s the one included in a regional, general audit on their website. However, the mine is currently involved in litigation with multiple parties which include QIT Madagascar mining, an Australian investment group and a regional tribal government. None of the entailed parties include a Mr. Harald Seiz or associates.
- “Acquired a fully licensed bank called “Karat Coin Bank” in Miami. Fully operational by mid-June. We own one of the world’s first crypto banks with a full license.”
Another vague statement that a simple inquiry into the corporate name “Karat Coin Bank” with the Florida Corporate Commission that appeared as non-existence, or even anything with a similar brand. The addresses provided also redirect to non-existent locations.
- “We’ll work from now on with 3 of the largest gold traders in Asia, with sales of several hundred million a day.” & “In the future we will use our KaratGold Coin for gold transactions as a currency. This week we will be listed on Hit BTC one of the biggest exchanges worldwide. And we will also get Binance onboard.”
Likely false & completely false. With ZERO evidence of a gold reserve or published ownership rights to ANY mineral findings, there probably isn’t going to be a lot of trading going on. At the time of this video, a simple jaunt over to their site (https://hitbtc.com/) and a query for “KaratGold Coins” or “KBC” returned zero results. (As of 10/31/2018, they appear to be listed at the generous value of KBC/0.00000230 BTC ((KBC = $0.015))
Familiar claims from a familiar scheme:
I highly advise anyone interested in this identifiable pointless token, attached to a M-L-M scheme to do their own research before purchasing. Literally all the evidence presented as to the value of this token and any other claims are completely unfounded and have been presented solely by Mr. Seiz and his organization via his website and videos. All claims being presented with ZERO corroborating documents that establish ANY ownership or metric of a physical reserve security.
But, maybe buying some in hopes that it might develop an intrinsic value one day is a good idea?
I don’t claim to give investment advice, but I think the evidence would suggest a resounding “NO”
I’d highly recommend re-evaluating any portfolios that may be comprised of assets, tied to potentially non-existent reserve commodities IMMEDIATELY.
As always, please perform your own due diligence when deciding to invest in anything and always thoroughly research claims made by anyone promoting security products.
