The ICO has all but died, but the ICO scammer marches on. Whereas legal projects have to wrangle with all of the challenges.
The initial coin offering has all but died, but the ICO scammer marches on although. Whereas legal projects have to wrangle with all kinds of challenges, including the strength of the market, generating value for investors, creating a natural product and delivering on the promises they make, the soulless scammer is unencumbered technical constraints, work ethic or any sense of decency.
Much like the humble cockroach, there are few conditions in which the ICO scammer cannot operate. Even with peak ICO and token mania well behind us, scammers persist. However, there are a few things guaranteed to make scammers scatter, including judicial action, regulatory enforcement, and of course, unwanted press.
The following ICOs have all been branded scams, despite their orchestrators noisily protesting their innocence. Blockchain may be fertile soil for the shoot up of new ideas, but it is also a dumping ground for risible ideas and con artistes who confuse their true intentions.
One idea drifting around the crypto bowl for some time now is a gold-backed cryptocurrency. Karatbars is an example of the gold-backed fad and has attracted some tough questions lately. In 2018, the German firm began Karatgold Coin (KBC) after an ICO that raised $100 million.
To follow that first fundraiser, Karatbars is now looking to conduct another ICO in 2019. This time the company claims to be creating the Karatbank Coin (confusingly also KBC) for its cryptocurrency bank in Miami, leading the Florida Office of Financial Regulation (OFR) to open an investigation into the company, which is still ongoing.
In a video on the Karatbars homepage, Dr Harald Seiz introduces himself as “the visionary and founder of Karatbars”, which is enough to raise an eyebrow if not a red flag. A Youtube video on April 2019 titled ‘Karatbars Harald Seiz To Create 20K Millionaires by 2021!’ is enough to raise greater suspicion still. Products on the Karatbars site include gift cards, credit cards and actual paper money, all of which can be sold with affiliate marketing. Regulators in the Netherlands called this gold buying and selling system’ multi-level marketing,’ while Namibia was plaining to call it a ‘pyramid scheme.’
What of gold itself on which the Karatbars concept is built? Sovereign researchers have failed to verify the goldmine’s existence, which the firm claims to own. While sceptical minds have often claimed that a goldmine is simply a hole in the ground owned by a liar, not even the void exists in the case of Karatbar.
