Karatbars International securities fraud warning from Canada
The Ontario Securities Commission has published a securities fraud warning against Karatbars International.
The OSC added Karatbars to its warning list back in July. We missed that notice but are covering it now as a matter of record.
As per the OSC’s July 7th warning;
Karatbars International GmbH and Karatbit (including Karatbit Exchange) are not registered or recognized in Ontario, Canada to engage in either the business of trading in securities or the facilitation of transactions relating to securities (including buying and selling securities), respectively.
Karatbars International is not registered to offer securities in Canada or anywhere else in the world.
Canada’s AMF previously issued a securities fraud warning against Karatbars International in March 2014. This was followed up by an outright ban issued in 2016.
The OSC’s recent warning appears to be a reiteration that Karatbars International is still illegally soliciting investment from Canadian residents.
Following regulatory warnings over the past year and a bit from Namibia, Germany, South Africa and New Zealand, Karatbars announced it was changing its name to Freebay in September.
The reboot follows the disastrous 2019 KaratGold Coin Ponzi coin launch, which resulted in widespread investor losses.
Freebay brings with it V999, a new Ponzi token for Karatbars to scam investors through. KaratGold Coin (KBC) has been abandoned.
Karatbars International and Freebay are operated by Harald Seiz from Germany.
Despite Karatbars operating as a scam for years (BehindMLM first reviewed Karatbars’ initial pyramid scheme model in 2014), German authorities have failed to take any action.
I have been defrauded, in the last few years, by Karatbars practitioners. I have not been able to access my purchased gold, still in Karatbars possession, for over a year and half.
There has been no response to my many attempts to contact them over that time period. Prior to that, I lost $2000 CA when my upline (3 levels) all disappeared to sell another product.
I have not been well the last number of years or I would have looked into this before now. I am a senior, not well enough to work the last year. I cannot afford to lose $3500.
I am also upset to be taken advantage of by someone I thought was a friend, who assured me the others she was working with were legitimate. Are they going to get away with this?
Do I have any recourse in Canada? Please let me know..
Hi Joanne,
Sorry to hear about your situation. Unfortunately you invested in a Ponzi scheme and got taken for $3500.
There never was any gold and the money you invested is gone. It’s not sitting somewhere in a pot waiting to be recovered.
Karatbars is run out of Germany. Your best bet is reporting whoever recruited you into this mess to your local authorities.
Note that given you’re in Canada, this is unfortunately unlikely to go anywhere.
Are you telling me that the gold in my possession is worthless?
The gold isn’t in your possession, is it.
I have the gold I own still in Karatbars possession that I mentioned before.
And I have Karatbars gold in my possession that I did not include in my losses.
Mate that gold doesn’t exist. Sorry for your loss.
Mate, I have Karatbars gold in my possession.
You might have been able to withdraw a bit before Karatbars collapsed. What you didn’t withdraw is gone.
Karatbars’ gold era was a pyramid scheme. Unless you got in early and recruited a bunch of victims you were mathematically guaranteed to lose money.
Nobody is saying a limited few didn’t get anything out necessarily.
What’s obvious is that it’s collapsed and the majority of people lost everything, and the numbers on the screen meant nothing.
Elaborate on this a bit, if you would be so kind.
Do you mean you actually have yellow metal that you bought thru KB that you can touch, stroke, put it in your pocket?
How much did it cost you and when did you get it?
Tia.
Joanne, any gold you have within arm’s reach is all there is. When you withdrew “your” gold from Karatbars, they didn’t reach into their vault to fetch the pile of gold with your name on it; they bought gold and shipped it to you.
Oz described how the scam worked in his reviews of Karatbars, and numerous times to commenters who said it had to be legit because they had actual gold.
Yes, some people got some gold when they demanded it; otherwise, the cover story would have been blown.
In reality, sadly, when you thought you were buying gold, you were just throwing your cash into a Ponzi slush fund, and they put numbers on your account that said they were holding gold for you. But they weren’t.
That’s why Oz and others are telling you there is no gold at Karatbars with your name on it. In truth, there never was.
Take it to a reputable jeweller’s and ask them.
Your first post said that “your gold” was in Karatbars’ possession, then you changed your mind and said some is in Karatbars’ possession and some in yours.
When someone says “I’ve got some money in a pyramid scheme” the default assumption is that all they have is some numbers on a screen.
It is not out of the ordinary for a gold-based pyramid scheme to send marks a few dollars worth of gold to keep the new money coming in. It would also not be out of the ordinary for them to tell them “here’s your $X amount of gold” when in reality it’s worth far less than that.
So if you’ve got gold from Karatbars in your possession you need to get a professional to value it if you want to know what it’s worth.
If you are unable to make ends meet you should check what state benefits you are entitled to and consider contacting a charity that offers support for those in need rather than wasting further time and energy on the money you lost in a pyramid scheme.
Demanding a refund from your upline is the only other option worth mentioning (you may be able to bring more pressure to bear on them than on the central scheme in Germany).
Hello Tia,
Thank you for your question. Yes, I actually have yellow metal that I bought thru KB that I can touch, stroke, put it in my pocket. Right now it is in my safe.
I purchased it over several months late 2016/early 2017, something like 400 grams, costing approximately $4000 CA at the time.
Several people I knew said they had their KB gold checked for its authenticity with no problem. I intend to have it checked myself as I have reported fraud to the Canadian RCMP who have opened a file to investigate. I need to establish for sure what my losses are.
I had no issues having my gold shipped. it was the gold I purchased monthly from mid-2017 to mid-2018, costing approx $1200 CA that I have not been able to access.
I was ill, with too much on my plate at the time, and did not have that gold shipped immediately.
The difficulty began in late 2019. If I was in better health, I would have dealt with this before now.
Thank you, Malthusian, for answering my question.
Yes, I will be having the KB gold in my possession evaluated. As both you and Oz suggested, I have filed a fraud complaint with the Canadian RCMP including the 4 names of very wealthy individuals living in Vancouver, Canada, with whom I had dealings.
I understand fraud and ponzi schemes. Unfortunately, I trusted in charming sociopaths. I know there were local Karatbars gatherings at least into 2018.
There have to be many people here who have been taken advantage, yet I find nothing online or in the media. We will see what happens with the RCMP investigation.