German Financial Regulator, BaFin, Halts Karatbit’s Gold Backed Crypto (KBC) Distribution
German financial regulator, BaFin, recently ordered Karatbit to close its operations within the country’s FinTech ecosystem. Karatbit, a blockchain-oriented business, had launched a gold-backed crypto coin as well as other products that are currently in distribution.
The crypto being issued by Karatbit is dubbed ‘KaratGoldCoin’ (KBC); the firm has however been doing so against the law according to BaFin. Karatbit’s operations mostly involve crypto and gold-based payments on a blockchain platform. This FinTech firm prides itself with a rich network as they claim over 500 point of sales, accept their products globally while KBC token users can leverage around 10 crypto exchanges to trade their assets.
Karatbit’s Unlicensed Crypto Business
German authorities through BaFin identified Karatbit’s operations to be among the unlicensed cryptocurrency activities. The order to cease distribution automatically followed although it is subject to judicial review.
Furthermore, Karatbit may soon be a subject of an investigation following an initiative to hold them accountable brought forward by a Stuttgart-based prosecutor. The blockchain firm has however denied any commencement of investigations so far; they claim no partner or client has suffered losses attributed to their products.
The Blockchain-payments firm added that the KBC token was issued as a reward which accompanied other Karatbit products. According to them, BaFin’s hostile reaction was a result of information from a counterfeit ‘Karatbit’ website.
Gold Mine Guarantee for KBC Tokens Stability
Karatbit has assured its clients that the stability of KBC tokens is a true concept given they own an $990 million gold mine in Madagascar. The firm’s founder, Harald Seiz, also noted that they had sold $100 million worth of KBC tokens to date.
Ownership reports of the gold mine, however, remain uncertain given Seiz is yet to publicly prove he has a stake. Karatbit has also been found using prominent footballers’ images without consent to do so in a bid to sell its product. Patrick Kluivert, Roberto Carlos and Lothar Mattäus are among those affected by Karatbit’s wayward marketing activities.