A growing list of cryptocurrency-themed projects has turned out to be complete scams. Most of those ventures are no longer around, although there are some exceptions. In the case of Karatbars, it seems things have begun to unravel in quick succession. The project is under investigation for a variety of reasons.
Karatbars and its Gold Reserves
Regulators in the US have taken offense to the Karatbars project. Not just because of its upcoming crypto bank venture, but also because there are a lot of factors which simply do not add up. The company behind this venture raised $100m through an initial coin offering in 2018. Investors assumed they were buying into a cryptocurrency which is backed by actual gold reserves.
This is where the first problems have arisen. To this date, no one has been able to verify the company has any gold reserve in the slightest. Furthermore, the initial coin offering was organized without an official license, and the company doesn’t own a banking license either despite claiming the token is tied to their…