The German regulator- the financial supervisory authority along with the South African regulators took actions over sales of a purportedly gold-backed cryptocurrency as we are reading further in the latest cryptocurrency news today.
The German regulator disclosed back on Monday that it had issued a cease-and-desist order against Karatbit Foundation for issuing the KaratGold coin without necessary licensing in the country. The South Africa Financial Sector Conduct Authority warned the consumers to avoid the investments that were offered by Karatbars International GmbH which is a German company that promotes the reportedly gold-backed KaratGold.
With the BaFin order, the foundation has to ‘wind up its electronic money business’ in Germany as per the regulator. BaFin didn’t quite respond to requests for comment by press time. Running on the Ethereum blockchain, the KaratGold Coin is officially listed on about 25 exchanges. The Belize-based Karatbit Foundation is the issuer of the coin and the manager of the entire ecosystem according to the KaratBank coin white paper which is why the entity is considered unregulated.
Karatbars International has denied all of the accusations that were leveled in the German business publication Handelsblatt according to the company posts and a story that was published on Wednesday by TheGuardian. The media outlet reported that the Karatbit Foundation is under orders to return the investors’ funds that reached up to $100 million which is equivalent to the amount that was raised in 2018.
Harald Seiz who is the CEO of Karatbars stated that the German regulator is mistaken the order against the firm basing the actions on a scam website that is not associated with the company. He claimed:
“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.’’
The FSCA explained that Karatbar International solicited multiple South African investors via WhatsApp to purchase unspecified investments without holding the authority to operate in the country and the warnings from South Africa and Germany came later after it was reported that the Florida Office of Financial Regulation stated that Karatbars is not licensed as a bank.
First-Ever Collectible Crypto Coin Will Be Issued In 2020
“This innovative coin will feature the signatories due to their significant role in the country’s history and contribution to the restoration of our independence.”He also said that the project will be a source of invaluable experience and know-how in the processes of creation cryptocurrencies for the Bank of Lithuania. This may be the first step for Lithuania if it wants to insert itself in the race for cryptocurrency emitting by the central bank, in which the undisputed leader in China where a pilot scheme has already been planned.The announcement added that it is expected to have encouraging effects on younger people in coin collecting as a consequence of the token, and also it can be an innovative way of introducing them with cryptocurrency and blockchain technology. The collectible crypto coins will be sold exclusively on the digital store of the Bank of Lithuania and it will not represent a legal tender.The collectors will get six random coins and will have the opportunity to exchange them for a physical silver coin after one from all of the six categories will be collected. The value of the physical coin will be symbolic of 19.18 euros representing the iconic date in the national history of Lithuania. A YouTube video portraying the launch displays the collectible coins as square tokens, probably with the symbolism of their place on the blockchain. The silver token will be the size of a credit card, and also will depict the Act of Independence and its signatories.The announcement stated continually that this commemorative action is an instrument in assisting the implementation of the Bank of Lithuania’s strategic direction in the sector of innovation and fintech. It has the aim to assist local and global businesses enriching their knowledge of blockchain and the comfort that cryptocurrencies afford.
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MATIC Collapses 70% In Less Than Hour Showing Liquidity Issues
“They did a shitcoin airdrop today, then the usual sell the news happened but for the first time we had margin trading on an illiquid Binance book in place to cause a cascade.”The MATIC network was one of the binance initial exchange offerings and it seems that the exchange can inadvertently take life as well as inject it into the altcoin itself. According to announcements, it was pitched to be the next greatest thing in blockchain by offering the layer 2 scaling solution that achieves scale by utilizing sidechains for the off-chain computation. Right now, the token price is scaling rapidly in the wrong direction.Another theory for the collapse is that a few MATIC addresses hold about 99 percent of the supply which could lead to massive manipulation if there is a coordinated liquidation. In terms of market cap, the amount dumped equates to more than $60 million some of the other theories include that there is a massive pump and dump, at least according to crypto trader ‘’Welson’’
“This is why it’s never a good idea to FOMO into a shitcoin, especially when the owners have 90% of the supply. Once they’ve manipulated prices to a high level, they will sell everything and have the buyers be left holding the coins for life.”The crypto guru Willi Woo stated that 99 percent of the current altcoins on the markets have virtually zero liquidity. For an asset to be tradable it has to have daily volume. MATIC is not the only token that crashed at the moment and the big dump seems to have hit some of the other illiquid cryptocurrencies including Ravencoin and Energi.
BigTech Companies And Their Crypto Pose A Threat To Global Stability
‘’Where stored value payment products (e.g. mobile wallets) become prominent, a relatively large and potentially mobile pool of funds may be controlled outside the banking system (though often these funds are ultimately deposited with banks)… Furthermore, the greater mobility of this pool of funds compared with the customer deposits may also reduce the stability of bank funding.’’The FSB is not alone in this stance, warning that the BigTech companies and their involvement in crypto assets could destabilize the banks worldwide. Several governments and regulators stated that the Libra crypto project could even affect negatively their ability to control sovereign monetary policies. Such is the level of opposition towards their involvement in digital payments that some of the regulatory stakeholders say their proposed solutions could be domiciled with the mainstream financial institutions. Some of the central banks are also working hard towards the creation of their own national cryptocurrency.The FSB reports also show that BigTech’s payment entry could expand the problems already identified with fintech lending and the new forms of credit could emerge from this trend are untested which have never gone through a complete financial cycle. The server credit crunch coincides with the proliferation of BigTech payment projects which could end up with negative economic consequences. The FSB is also keen on closely monitoring on Libra's crypto project as well.
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