Bitcoin
BTC$19 030.21

-0.32%

Ethereum
ETH$1 326.48

0.13%

Tether
USDT$1.000084

0%

USD Coin
USDC$0.999981

-0.01%

Binance Coin
BNB$276.61

-2.41%

XRP
XRP$0.486640

-3.42%

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

The crypto market has taken a hiatus from the sell-off
The crypto market has taken a hiatus from the sell-off
ETH After the Merge: Fall Instead of Growth
ETH After the Merge: Fall Instead of Growth
Dogecoin becomes second largest PoW cryptocurrency
Dogecoin becomes second largest PoW cryptocurrency
Crypto bears confirmed their strength
Crypto bears confirmed their strength
The crypto market has taken a step up but has not yet fly
The crypto market has taken a step up but has not yet fly
Cryptocurrencies: Main Week of the Calendar
Cryptocurrencies: Main Week of the Calendar
Is Bitcoin heading to $15K? Why are the markets suddenly pulling back?
Is Bitcoin heading to $15K? Why are the markets suddenly pulling back?
Ethereum Merge to swamp other coins with miners
Ethereum Merge to swamp other coins with miners
All Hope for Ethereum
All Hope for Ethereum

Top Cryptocurrencies with Price Predictions

# Crypto Prediction Accuracy CVIX Price 24h 7d Market Cap 7d price change
1 Bitcoin (BTC) BTC Bitcoin predictions 84.4% 28 $19 030.21 -0.32% -5.10% $364 618 489 584 BTC 7 days price change
2 Ethereum (ETH) ETH Ethereum predictions 74.4% 56 $1 326.48 0.13% -8.81% $162 515 564 561 ETH 7 days price change
3 Tether (USDT) USDT Tether predictions 94.4% 1 $1.000084 0% 0% $67 960 431 405 USDT 7 days price change
4 USD Coin (USDC) USDC USD Coin predictions 94.8% 1 $0.999981 -0.01% -0.01% $49 713 550 202 USDC 7 days price change
5 Binance Coin (BNB) BNB Binance Coin predictions 86.4% 17 $276.61 -2.41% -0.50% $44 627 031 173 BNB 7 days price change
6 XRP (XRP) XRP XRP predictions 64.8% 72 $0.486640 -3.42% 30.75% $24 258 385 474 XRP 7 days price change
7 Binance USD (BUSD) BUSD Binance USD predictions 91.2% 1 $1.000205 0.02% 0.07% $20 521 449 661 BUSD 7 days price change
8 Cardano (ADA) ADA Cardano predictions 80% 32 $0.454931 -1.45% -5.80% $15 571 509 175 ADA 7 days price change
9 Solana (SOL) SOL Solana predictions 84% 31 $33.80 0.27% 0.09% $11 987 371 735 SOL 7 days price change
10 Lido stETH (STETH) STETH Lido stETH predictions 93.2% 1 $2 941.39 -0.40% -3.32% $10 258 752 564 STETH 7 days price change
11 Dogecoin (DOGE) DOGE Dogecoin predictions 86.8% 14 $0.063036 -4.59% 2.47% $8 363 011 604 DOGE 7 days price change
12 Polkadot (DOT) DOT Polkadot predictions 79.6% 43 $6.31 -2.20% -9.86% $7 073 245 562 DOT 7 days price change
13 Dai (DAI) DAI Dai predictions 95.2% 1 $1.000136 0.03% 0.02% $6 930 359 263 DAI 7 days price change
14 Polygon (MATIC) MATIC Polygon predictions 72.8% 54 $0.761561 -1.51% -7.49% $6 651 718 356 MATIC 7 days price change
15 SHIBA INU (SHIB) SHIB SHIBA INU predictions 76.8% 42 $0.000011 1.38% -3.89% $6 272 885 542 SHIB 7 days price change

Be the first to receive Cryptocurrency Price Predictions and Forecasts daily

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

© 2015-2022 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.