Bitcoin
BTC$43 081.91

1.35%

Ethereum
ETH$2 973.82

2.01%

Cardano
ADA$2.27

-2.69%

Tether
USDT$1.000723

-0.06%

Binance Coin
BNB$342.55

-2.18%

XRP
XRP$0.942011

0.16%

Karatbars faces regulatory scrutiny


10 Oct 2019

Since cryptocurrencies came into existence, countless crypto-related projects have been launched, and these have run different kinds of token offerings. Initial coin offerings (ICOs) are the most common method that has been used by projects to launch their tokens and attract investors. Many of these projects are no longer in business and it seems as if they were scams more than anything else. This has led to a negative perception of cryptocurrencies and the ICOs that are used to launch tokens.

Karatbars faces regulatory scrutiny


US regulators have been taking action against a number of ICOs, and Karatbars has become one of the latest projects to face questions from regulators. The project ran an ICO in 2018 through which $100 million was raised. The company announced that it would be entering a crypto bank venture which raised several questions of its own. The biggest problem that regulators have with the project is that investors who participated in the ICO believed that they were purchasing a crypto asset backed by gold reserves, a promise that is likely false.

There has been no confirmation that the company has any gold reserves to back its token, and the company itself has failed to provide any proof to back its claims. The ICO itself was conducted with no official license or regulatory permission which is a violation of the laws that govern ICOs. Karatbars does not have a banking license although the company claimed that its crypto asset is tied to their crypto bank which is supposedly based in Miami. All these issues raise a lot of red flags about Karatbars, and many have begun to question if there is a shred of legitimacy behind its business.

Karatbars recently announced that it would be running a second token offering to raise additional funds. No solid explanation has been given regarding what these funds are needed for, and there is no information explaining how the initial $100 million raised during the 2018 ICO was used. The company has failed to deliver on all the promises it made to investors and it does not look like there is anything solid coming out of the project. The tokens that investors purchased during the first ICO are essentially worthless because the gold reserves that supposedly back the crypto assets are non-existent.

Investors should be concerned


Karatbars made several claims and promises that it has failed to back up since it ran its ICO. Investors will be looking at all the red flags that surround the company with concern, and rightly so. There have been several crypto projects that have made outlandish promises to their investors and have failed to deliver on these promises, and it looks like Karatbars may be one such project.

Investors should be wary of projects that make such promises, and with the firm planning on running a second coin offering, due diligence should be applied before purchasing the tokens. It is highly likely that the company will face action from regulators pertaining to the activity of the ICO. Hopefully, Karatbars is not running a scam, and investors will get the rewards they were promised before they invested in the company.

Author: Ali Raza for Crypto-Rating.com

Related

Bitcoin bulls make a run on $45K after Twitter debuts crypto tipping
Derivatives data favors Ethereum bulls even with this week's crash below $3K
Buyers have returned to cryptocurrencies
Here’s why Avalanche, OriginTrail and Coti hardly budged as Bitcoin fell to $40K
Dogecoin more popular than ever
Altcoins see a 35% bounce after Bitcoin reclaims $43,000
FBS Launches New Crypto Account with 100+ New Instruments
Ethereum's spot setup looks grim, but derivatives data tells a different story
Bitcoin in good shape as long as BTC price stays above $40K

Top Cryptocurrencies with Price Predictions

# Crypto Prediction Accuracy CVIX Price 24h 7d Market Cap Volume 24h
1 Bitcoin (BTC) BTC Bitcoin predictions 81.2% 35 $43 081.91 1.35% -8.98% $811 087 159 268 $32 566 242 601
2 Ethereum (ETH) ETH Ethereum predictions 72.8% 49 $2 973.82 2.01% -10.60% $349 960 860 996 $21 587 502 761
3 Cardano (ADA) ADA Cardano predictions 62.4% 80 $2.27 -2.69% -2.67% $72 581 341 919 $5 657 027 599
4 Tether (USDT) USDT Tether predictions 93.2% 1 $1.000723 -0.06% 0.06% $68 592 541 921 $78 405 017 855
5 Binance Coin (BNB) BNB Binance Coin predictions 66.4% 69 $342.55 -2.18% -15.33% $57 594 887 329 $1 834 859 342
6 XRP (XRP) XRP XRP predictions 72% 52 $0.942011 0.16% -11.07% $44 008 512 090 $3 471 846 458
7 Solana (SOL) SOL Solana predictions 66.8% 73 $134.99 -3.62% -13.48% $40 130 984 296 $2 394 353 078
8 USD Coin (USDC) USDC USD Coin predictions 92% 1 $1.000373 -0.04% 0.04% $30 961 410 947 $3 802 192 647
9 Polkadot (DOT) DOT Polkadot predictions 67.6% 69 $29.14 -4.71% -12.32% $28 777 972 657 $2 530 767 375
10 Dogecoin (DOGE) DOGE Dogecoin predictions 62% 77 $0.204356 -1.83% -12.96% $26 862 009 468 $1 490 518 775
11 Avalanche (AVAX) AVAX Avalanche predictions 61.2% 87 $67.41 -4.29% -4.38% $14 849 661 345 $1 216 715 313
12 Terra (LUNA) LUNA Terra predictions 69.2% 59 $36.08 -4.62% 4.12% $14 432 557 786 $1 639 919 020
13 UniSwap (UNI) UNI UniSwap predictions 65.6% 74 $22.79 17.61% -3.84% $13 937 536 203 $1 041 192 676
14 Binance USD (BUSD) BUSD Binance USD predictions 94.4% 1 $1.000271 -0.06% 0.03% $13 693 035 619 $5 465 909 777
15 Chainlink (LINK) LINK Chainlink predictions 67.2% 70 $24.73 9.02% -10.79% $11 252 316 912 $1 925 712 695

Be the first to receive Cryptocurrency Price Predictions and Forecasts daily

Get cryptocurrency price predictions, forecasts with analysis and news right to your inbox.

© 2015-2021 Crypto-Rating.com

The usage of this website constitutes acceptance of the following legal information. Any contracts of financial instruments offered to conclude bear high risks and may result in the full loss of the deposited funds. Prior to making transactions one should get acquainted with the risks to which they relate. All the information featured on the website, including information about the cryptocurrencies and bitcoin is intended solely for informational purposes, is not a means of advertising them, and doesn't imply direct instructions for investing. Crypto Rating shall not be liable for any loss, including unlimited loss of funds, which may arise directly or indirectly from the usage of this information. The editorial staff of the website does not bear any responsibility whatsoever for the content of the comments or reviews made by the site users about cryptocurrencies. The entire responsibility for the contents rests with the authors. Reprint of the materials is available only with the permission of the editorial staff.