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German firm told to wind up cryptocoin business after pyramid scheme allegations German firm told to wind up cryptocoin business after pyramid scheme claims
(about 1 hour later)
Karatbars used former football stars Lothar Matthäus, Roberto Carlos and Patrick Kluivert to promote productsKaratbars used former football stars Lothar Matthäus, Roberto Carlos and Patrick Kluivert to promote products
A German cryptocurrency company that used former football stars Lothar Matthäus, Roberto Carlos and Patrick Kluivert to promote its products has been ordered to wind up its blockchain-based business by Germany’s financial watchdog, following allegations it was luring customers into a pyramid scheme. A German cryptocurrency company that used the former football stars Lothar Matthäus, Roberto Carlos and Patrick Kluivert to promote its products has been ordered by a German watchdog to wind up its blockchain-based business after allegations it was luring customers into a pyramid scheme.
Karatbars, founded by Stuttgart-born former vacuum cleaner salesman Harald Seiz in 2011, has promised to revolutionise the world’s financial system through its internet-based currency. Karatbars, founded by a Stuttgart-born former vacuum cleaner salesman, Harald Seiz, in 2011, has promised to revolutionise the world’s financial system through its internet-based currency.
The company offers online purchases of “cryptonyzed gold” tokens to prospective “affiliates”, who are then offered a commission to sign up other affiliates.The company offers online purchases of “cryptonyzed gold” tokens to prospective “affiliates”, who are then offered a commission to sign up other affiliates.
A fully licensed “cryptocurrency bank” in Miami and a Madagascar mine containing €900m (£772m) worth of gold have been cited by Seiz as his company’s assets, thus guaranteeing the stability of his currency.A fully licensed “cryptocurrency bank” in Miami and a Madagascar mine containing €900m (£772m) worth of gold have been cited by Seiz as his company’s assets, thus guaranteeing the stability of his currency.
Seiz claims to have so far raised about $100m (£78m) through sales of his KaratGold Coin (KBC). Seiz claims to have raised about $100m (£78m) through sales of his KaratGold Coin (KBC).
At packed launch events in Cape Town and Amsterdam in June and September this year, Seiz spoke of Lamborghinis and luxury watches as rewards to his most eager affiliates.At packed launch events in Cape Town and Amsterdam in June and September this year, Seiz spoke of Lamborghinis and luxury watches as rewards to his most eager affiliates.
A video of the Amsterdam event, held inside the former stock exchange building, shows Carlos and Kluivert take to the stage as the presenter declares: “They trust our technology”. A video of the Amsterdam event, held at a former stock exchange building, shows Roberto Carlos and Kluivert take to the stage as the presenter declares: “They trust our technology.”
The same clip shows the former Netherlands international Kluivert praising the company in the highest tones: “This is a new community, a new world, this is going to be very big. The Karatbar and the cryptocoin is the future. I hope everybody will join this platform.” The same clip shows Kluivert praising the company. “This is a new community, a new world, this is going to be very big. The Karatbar and the cryptocoin is the future. I hope everybody will join this platform,” he says in the video.
The Amsterdam video also shows Matthäus, captain of the German World Cup winning team in 1990, telling the crowd: “The most important thing is, you have to believe.” Matthäus, the captain of the German World Cup winning team in 1990, is seen telling the crowd: “The most important thing is you have to believe.”
But arguments against blind faith in the company’s promises have been around for some time. In May, authorities in Namibia declared Karatbar a “pyramid scheme”, and last month Florida’s financial regulator denied the German company had been issued with a banking licence. But arguments against blind faith in the company’s promises have been around for some time. In May, authorities in Namibia declared Karatbar a pyramid scheme, and last month Florida’s financial regulator denied that the German company had been issued with a banking licence. On Monday South Africa’s Financial Sector Conduct Authority (FSCA) issued a warning for the public not to deal with the company.
On Tuesday, the German business newspaper Handelsblatt reported that the country’s banking watchdog BaFin had issued a cease-and-desist order to Karatbit Foundation, which is registered in Belize, and told the company to settle outstanding claims. The public prosecutor in Stuttgart had also opened investigations into the business, the paper reported. On Tuesday the German business newspaper Handelsblatt reported that Germany’s banking watchdog, BaFin, had issued a cease-and-desist order to Karatbit Foundation, which is registered in Belize, and told the company to settle outstanding claims. The public prosecutor in Stuttgart has opened investigations into the business, the paper reported.
South Africa’s Financial Sector Conduct Authority (FSCA) on Monday also issued a warning for the public not to deal with the company. An investigation by Handelsblatt raised questions about other claims made by the company. Karatbars’ presentation named the Madagascar gold mine that supposedly guaranteed the stability of its currency as Fort Dauphin, but according to miningdataonline.com the only mine on the island with that name contains only titanium and zircon.
An investigation by Handelsblatt also raises questions about other claims made by the company. Karatbars’ own presentation names the Madagascar gold mine that supposedly guarantees the stability of its currency as Fort Dauphin, but according to portal miningdataonline.com the only mine on the island with that name contains only titanium and zircon. Seiz and Karatbars are being sued by a Swiss academic who claims they plagiarised a report she wrote about the contents of a group of copper mines in Chile.
Seiz and Karatbars are also being sued by a Swiss academic who claims they plagiarised a report she had written about the contents of a group of copper mines in Chile. In an interview with Handelsblatt, Seiz conceded the report had been faked, blaming a former business associate, and he failed to provide evidence that he owned a stake in a gold mine at all.
In an interview with Handelsblatt, Seiz conceded the report had been faked, blaming a former business associate, and failed to provide evidence that he owned a stake in an existing gold mine at all.
In a statement sent to the Guardian, Karatbars denied that investigations had been launched into the company’s KBC cryptocoin. “No customer or partner has ever incurred losses due to Karatbars and its products,” said Seiz.In a statement sent to the Guardian, Karatbars denied that investigations had been launched into the company’s KBC cryptocoin. “No customer or partner has ever incurred losses due to Karatbars and its products,” said Seiz.
The company furthermore claimed German customers and sales partners were never sold the KBC cryptocoin, but that it was “only a free bonus gift that came with other Karatbars products”. The German financial regulator’s cease-and-desist order was based on information from a fake Karatbars website, the company’s statement said. The company furthermore claimed German customers and sales partners were never sold the KBC cryptocoin and it was “only a free bonus gift that came with other Karatbars products”. The German financial regulator’s cease-and-desist order was based on information from a fake Karatbars website, the company’s statement said.
Karatbars said it owned some shares in a mine in Toamasina, Madagascar, apparently contradicting the company’s statement in a 2018-19 “white paper”: “the gold mine in Madagascar having 900 billion euros was bought”. Karatbars said it owned some shares in a mine in Toamasina, Madagascar, apparently contradicting the company’s statement in a 2018-19 “white paper” that “the gold mine in Madagascar having €900bn was bought”.
“There is no cause for concern,” Seiz said in his statement. “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!” “There is no cause for concern,” Seiz said in his statement. “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.”
Contacted by the Dutch newspaper Het Financieele Dagblad, Kluivert denied being an ambassador for the cryptocoin company and said he had no business links with Seiz and had not invested in the currency.Contacted by the Dutch newspaper Het Financieele Dagblad, Kluivert denied being an ambassador for the cryptocoin company and said he had no business links with Seiz and had not invested in the currency.
“I was hired by an international football team friend from Spain for a guest appearance at a private event in Amsterdam,” said Kluivert, academy director of his former club, FC Barcelona. “I did some research online prior to the event, but didn’t see any negative messages.” “I was hired by an international football team friend from Spain for a guest appearance at a private event in Amsterdam,” said Kluivert, an academy director at his former club FC Barcelona. “I did some research online prior to the event but didn’t see any negative messages.”
A spokesperson for Matthäus said his client had neither acted as an official ambassador at the event nor did he maintain business links with the company.“Lothar Matthäus was invited to talk specifically about his career as a player. When he said ‘the most important thing is, you have to believe’, he was talking about struggling to return to football after a cruciate ligament rupture in 1992, not endorsing Karatbars’ products. Any other interpretation takes his comments out of context”. A spokesperson for Matthäus said his client had neither acted as an official ambassador at the event nor did he maintain business links with the company.“Lothar Matthäus was invited to talk specifically about his career as a player. When he said ‘the most important thing is you have to believe’, he was talking about struggling to return to football after a cruciate ligament rupture in 1992, not endorsing Karatbars’ products. Any other interpretation takes his comments out of context.”
Matthäus’s spokesperson said the player had not been familiar with Seiz prior to the request for an appearance. “A routine check which is carried out before all events visited by Mr Matthäus revealed no indications of irregularities.”Matthäus’s spokesperson said the player had not been familiar with Seiz prior to the request for an appearance. “A routine check which is carried out before all events visited by Mr Matthäus revealed no indications of irregularities.”
Carlos’s management did not respond when contacted for comment. Roberto Carlos’s management did not respond when contacted for comment.