Karatbars, a German cryptocurrency company offering online purchases of “cryptonized tokens” to the prospective “affiliates,” has been ordered by a German watchdog, BaFin, to cease its operations. Karatbars is accused of illegally luring the customers using its pyramid schemes. The company has been endorsing its products by some big celebrities of the football federation like Roberto Carlos, Patrick Kluivert, and Lothar Mathhaus.
The company was launched in the year 2011 by Harald Seiz, who promised to revolutionize the global financial system through the internet-based currency. As such, Karatbars focusses on maintaining the integrity and honesty of its business model. But amidst this huge success by the company, uncertainties about the company’s stability were doing rounds for quite some time.
Seiz has claimed on behalf of the company, that it has a total asset amounting to €900m (£772m) worth of gold in its Madagascar mine and has raised around $100m (£78m) through the sale of KaratGold Coins. KaratGold Coin is a cryptocurrency developed by Karatbars International that reigns the market of small gold items. The celebrity footballers were heard praising the company and talking about the sky touching future prospects of the company.
The company’s position began to shake when a Namibian authority accused the company of being a pyramid scheme. Accusations followed the company again when a financial regulator of Florida denied that KaratBars was issued any banking license. Suspicions rose to its heights when the investigation reports about the Madagascar mine of Karatbars came into the forefront. The reports said that the only mine by the name Fort Dauphin, which was claimed to be Karatbars’ Madagascar mine, had only Titanium and Zircon and not gold (as claimed by the company).
Following all these accusations, BaFin, the German watchdog has ordered Karatbars to settle all the outstanding claims. However, Seiz has denied all these accusations against his company and commented, “No customer or partner has ever incurred losses due to Karatbars and its products,” in support of the company’s truthfulness and stability. He also added,
There is no cause for concern. We are on track with all our projects. This is only someone trying to get in the way of Karatbars’ success. It won’t work.
Eventually, he failed to provide any evidences in support of his claims, which has worsened the matter. Seiz claimed that his company Karatbars owned some shares in a mine in Toamasina, Madagascar, which is apparently contradicting the company’s earlier statement made in the year 2018-19 “white paper” that said, “the gold mine in Madagascar having €900bn was bought.”