The Takeaway Florida regulators are investigating Karatbars, a German company that's been promoting a token tied to a Miami "Crypto bank" without any banking license in the state.
Karatbars previously issued a cryptocurrency purportedly backed by gold, but CoinDesk has been unable to verify the existence of the mine the company says produced the gold.
Before it entered the crypto space, Karatbars sold gold products online through an affiliate marketing system that regulators in three countries warned the public to avoid.
Karatbars International GmbH has announced plans to follow its first token sale with another one in December 2019.
The Florida investigation is not the first time Karatbars has come under regulatory scrutiny.
Regulators in the Netherlands and Namibia have issued similar public warnings, with the former calling Karatbars' business a form of multi-level marketing and the latter going so far as to label it a pyramid scheme.
The affiliate marketing strategy of Karatbars' earlier business carried over to the token issuance, and affiliates interviewed by CoinDesk said much of their buying activity took place on the company's own platform.
"We regret to inform you that there is no Fort Dauphin gold mine in Madagascar and Karatbars does not hold a mining permit in Madagascar."
Three KBC-holders interviewed by CoinDesk stated multiple times that Karatbars ran the world's largest ICO, praised the regulated state of the alleged crypto bank in Miami and mentioned purported endorsements from parties as diverse as the Vatican to the Real Madrid soccer team, neither of which responded to requests for comment.
LaRosa still holds a little bit of bitcoin and ether herself, although she has moved the majority of her investments into KBC. "Bitcoin is really backed by nothing. But our KBC is backed by gold, and the is backed by our assets," she said of her reasoning.
'Gold-Backed' Crypto Token's Promoter Investigated by Florida Regulators
Published on Oct 4, 2019
by Coindesk | Published on Coinage
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