Is Karatbars a scam?
The Financial Sector Conduct Authority – the financial services watchdog – says Karatbars International GmbH is not an authorised financial advisor or provider of intermediary services.
Regulators in several countries have warned against Karatbars.
The Bank of Namibia officially declared it a pyramid scheme while in Germany – the home of Karatbars - the banking watchdog issued a cease-and-desist order against it.
Karatbars is under investigation in the US and several reputable cryptocurrency news sites have issued warnings about it to the public.
The multi-level marketing company offers online purchases of cards and notes with tiny “cryptonyzed” gold bars embedded in them to “affiliates” who earn a commission when they enlist other affiliates.
They’re talking to desperate people… it’s very vague… criminals will take advantage of this… Exercise extreme caution. There are so many ways to buy gold through established channels…— Warren Ingram, Personal Financial Advisor - Galileo Capital
He then spoke to Thomas Valet, Communication Manager at Karatbars International (apologies, the audio quality is poor).
We intend to make gold affordable in small denominations…— Thomas Valet, Communication Manager - Karatbars International
Whitfield also spoke to a listener, Susan, who attended a Karatbars conference in Cape Town.
I was invited to join the conference… it was quite a strange affair… very theatrical… it was sort of a frenzy… pumping music… hyping people up… Then, a grand entrance – everybody started chanting – then Harald Seiz, the CEO, stepped in… it was like the Messiah walking into the room. There was a lot of emotional fervour… it was like a Rockstar on stage…— Susan, Karatbars conference attendee
The whole premise is based on belief and trust. They don’t offer any evidence. It’s like a personality cult…— Susan, Karatbars conference attendee
He [Karatbars CEO Harald Seiz] told the audience that a lot of people will tell them it’s a pyramid scheme. He then coached the audience on how to deflect those allegations…— Susan, Karatbars conference attendee
Finally, Whitfield interviewed Tony De Gouveia, one of the main South African affiliates at Karatbars International.
No, it’s not [a pyramid scheme] … Karatbars won a court case in Canada…— Tony De Gouveia, South African affiliate - Karatbars International
I get paid because people in the network buys the product… I would guess more than 10 000 people in South Africa are in Karatbars, buying gold.— Tony De Gouveia, South African affiliate - Karatbars International
Our legal firm in South Africa… have contacted the FSCA… giving the correct information about Karatbars…— Tony De Gouveia, South African affiliate - Karatbars International
For more detail, listen to the interviews in the audio below.
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