Share this article
German Regulator Orders ‘KaratGold Coin’ Issuer to Cease Operations
Two more governments have taken action against entities in the Karatbars ecosystem over sales of a purportedly gold-backed cryptocurrency.
Updated Dec 11, 2022, 1:56 p.m. Published Nov 15, 2019, 9:56 p.m.
Make us preferred on Google
The hammer is coming down again on the Karatbars ecosystem as German and South African regulators have taken separate actions over sales of a purportedly gold-backed cryptocurrency.
Germany’s Financial Supervisory Authority (BaFin) disclosed Monday that it hadissued a cease-and-desist order against Karatbit Foundation on Oct. 21 for issuing its KaratGold Coin without necessary licensing in the country.
STORY CONTINUES BELOW
Don't miss another story.Subscribe to the Crypto Daybook Americas Newsletter today. See all newsletters
Also Monday, South Africa’s Financial Sector Conduct Authority (FSCA) warned consumers to avoid investments offered by Karatbars International GmbH, a German firm that promotes the allegedly gold-backed KaratGold Coin.
Under the BaFin order, the foundation must “wind up [its] electronic money business” in Germany, the regulator said.
BaFin did not respond to requests for comment by press time.
Run on the ethereum blockchain, the KaratGold Coin (KBC) is listed on about 30 exchanges such as Yobit, with a second token, KaratBank Coin (KCB), yet to launch.
The Belize-based Karatbit Foundation is the issuer of the KaratBank Coin and manager of the Karatbank ecosystem, according to the KaratBank Coin white paper, which describes the entity as “unregulated.”
Karatbars International did not respond to questions by press time.
Karatbars shoots back
Meanwhile, Karatbars International has denied accusations leveled in German business publication Handlesblatt, according to a company Facebook posting Tuesday and a story published Wednesday by The Guardian.
reported Monday that the Karatbit Foundation is under orders to return investor funds amounting to $100 million, equivalent to the amount raised in a 2018 initial coin offering (ICO).
Harald Seiz, CEO of Karatbars, further said in the Facebook post that the German finance regulator is mistaken in its order against the firm, basing its actions on a scam website not associated with his firm. He further claimed that the Karatbit Foundation lies outside the regulator’s jurisdiction as German investors were barred from partaking in the ICO.
“We are completely transparent, we have nothing to hide, if there are unanswered questions, we will clarify them, of course, we fully cooperate with the relevant authorities and are very anxious to clear up any misunderstandings as fast as possible interested,” Seiz said in the post.
Seiz also said KaratGold Coin (KBC) is a utility token and therefore “not subject to prospectus” requirements under BaFin regulations and certain interpretations of European Banking Authority guidance.
“Karatbars and its products have never damaged a customer or partner," he said.
Regulatory run-ins
The FSCA said Karatbar International has solicited South African investors via messaging platform WhatsApp to purchase unspecified investments without holding the necessary authority to operate in the country.
The warnings from South Africa and Germany come a month after CoinDeskreported on a Florida financial regulator’s inquiries into Karatbars International.
As stated in that earlier report, although Karatbars has promoted a supposedly licensed “cryptocurrency bank” in Miami, the Florida Office of Financial Regulation has stated that Karatbars is not licensed as a bank with the regulator.
Karatbars was also the subject of a recent consumer warning from Nambia and a prior warning in 2014 from the Netherlands.
UPDATE (Nov. 15, 22:10 UTC): An earlier version of this story contained outdated information. HitBTC used to list KaratGold Coin, but it recently delisted the cryptocurrency.
BaFin image via Shutterstock
More For You
KuCoin captured a record share of centralised exchange volume in 2025, with more than $1.25tn traded as its volumes grew faster than the wider crypto market.
What to know:
- KuCoin recorded over $1.25 trillion in total trading volume in 2025, equivalent to an average of roughly $114 billion per month, marking its strongest year on record.
- This performance translated into an all-time high share of centralised exchange volume, as KuCoin’s activity expanded faster than aggregate CEX volumes, which slowed during periods of lower market volatility.
- Spot and derivatives volumes were evenly split, each exceeding $500 billion for the year, signalling broad-based usage rather than reliance on a single product line.
- Altcoins accounted for the majority of trading activity, reinforcing KuCoin’s role as a primary liquidity venue beyond BTC and ETH at a time when majors saw more muted turnover.
- Even as overall crypto volumes softened mid-year, KuCoin maintained elevated baseline activity, indicating structurally higher user engagement rather than short-lived volume spikes.
More For You
Kevin O'Leary says power is now more valuable than bitcoin
"Shark Tank" investor Kevin O'Leary is pivoting his crypto strategy from tokens to energy infrastructure, declaring that power generation is now the real prize.
What to know:
The big pivot: O'Leary has moved capital away from smaller tokens to focus on physical infrastructure like land, power, and copper.
- He believes power is now "more valuable than bitcoin" and has secured significant land deals with stranded natural gas in Alberta and the U.S.
- His thesis is driven by the massive energy needs of bitcoin mining and AI, noting that entities controlling power can serve either market.
- He advises investors to look at copper and gold, noting copper prices have nearly quadrupled for his projects in the last 18 months.
- He views Robinhood and Coinbase as "no-brainer" infrastructure investments, having reallocated capital from altcoins into these platforms. He describes Robinhood as the premier bridge for managing equity and crypto in one portfolio, while labeling Coinbase the "de facto standard" for businesses to manage stablecoin transactions and vendor payments once regulatory acts pass.
Top Stories
