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Is Karatbars a Scam?

Update: Various Regulators Around The World Are Now Warning People To Stay Away From Karatbars

News just in is that (especially for South African citizens) the FSCA has issued a warning about the business practices of Karatbars. This warning was reported on in mainstream media subsequently and seems to vindicate much of what you’ll read below.

A Guardian article reports on what the German regulators had also announced at the same time.

Coindesk previously reported that Karatbars was under investigation.

The wheels of justice rolls very slowly but when it does work properly, then it can be very thorough.

The writing is on the wall now and it is very evident. what this company is all about. My advice is, if you’re already a customer and affiliate of Karatbars, get your money out, if you can at all.

If you’re still investigating this company and considering if you should get involved, stay far away.

There are many more ethical gold dealer’s that you can be an affiliate for and make money from the gold investment community.

With everything that the regulators have now published and the unfolding of this company will continue to unfold, I think it’s now safe for me to say that Karatbars is an outright scam.

Their MLM style model of business opportunities is simply an elaborate pyramid scheme or ponzi scam.

My opinion is that Karatbars is simply another of these MLM cults and you have to allow yourself to be brainwashed into cult and live it out to its full expression to get anywhere in the industry and you run the risk of alienating yourself from those that really matter in all the important parts of life not just of material abundance.

Below I’ll compare prices of 1g gold bars from Karatbars to other gold dealers.

bullionstar 1g savings

goldsilver 1g gold bar

karatbars 1g gold card

As you can see, prices from Karatbars don’t compare well to the cheaper bullion dealers. Especially those that charge only few bases points above the spot price.

In addition, I get a feeling that to sell your gold back to them would be hard too, but I can’t speak from my own experiences in this regard.

Before we continue with our investigation, let’s hear what this self proclaimed scam buster thinks about Karatbars.

https://youtu.be/zv73VGOQDcQ

Its going to be hard for most people to make money from this program and you’re better off simply buying gold, for example from Bullion Star or Gold Silver, at the current spot price and holding it or join any of these affiliate programs for free, instead of signing up to this mlm scheme.

In my investigation I came across these articles and I suggest you read these this behindmlm article and make up your own mind.

I signed up with Karatbars very soon after an exchange with a Facebook friend talking about a random video I posted on the global financial collapse we’re about to see and in talking about gold and bitcoin and stuff, I quickly signed up under her on a whim.

But after getting annoyed with an admin of one of the Facebook group https://www.facebook.com/groups/karatbarsworld I quickly rethought my involvement as the narrow minded approach she took in me sharing my link left much to be desired.

It was a blessing in disguise, I thought, as I spurred me on to do some more research on them on Google. Not comprehensive you understand, I just googled “Karatbars scam” and came up with some interesting conversations on forums and sites and I share some of that here:

Make your own mind up about this company.

Don’t let any of the agents of this company pressure you into buying their packages.

Contact me if you’re looking for a really easy way to earn passive income online and if you do join Karatbars after all of this, I wish you the all the success you want, but you have been warned.

16 responses to “Is Karatbars a Scam?”

  1. My name is Fahiem and I bought a Silver package from an affiliate from Karatbars. I paid R12000.00 (750 Euros) for it in October 2019 and on 27th April 2020 It was worth R 3360, 89 (R 164.241 Euros).
    I did not want to become a active affiliate unless I know I can sell the product of Karatbars to someone that’s not interested in becoming an affiliate with confidence knowing they get quality for their money spend. Such a lot was bragged about the KBC and KCB coins. Now When I asked Karatbars what can I do to opt out? The answer was sell the gold I bought to a third party. This would have resulted in a major loss. Also nothing was said in the response about the so called KBC and KCB coins neither anything to convince me TO NOT get out. Now when I took it up on a chat with Karatbar affiliates on an affiliates chat I was blocked / removed from the chat. On the other chat named “ back to basics “ I was told that they not to blame if I cannot go into business by being an active affiliate. No one on the chats could explain how me having bought into it gain from it. The only way is to buy even more gold. Also the explanation was that the ONLY way to make money currently is to sell the products. How do one sell a product that you only make money that uses a commodity such as gold as a front. This is clearly a pyramid scheme that uses gold as a front to make it appear that it’s not a pyramid scheme. This is just my opinion from my experience with karatbars and its affiliates.

  2. A horrible example is to post a video from somebody like Ethan Vanderbuilt. What this man does is target perfectly legitimate companies, writes a negative blog article on them with a keyword that has high traffic like “scam”. He does this so that others can visit his page and click on the ads there, from where he receives revenue.

    He has done this with countless different companies that many people have complained about this unethical behavior. I highly recommend anybody to do their due diligence by simply typing “Ethan Vanderbuilt” in Google, and then decide for oneself if this person is a reliable character.

    Second, Karatbars is not a glorified Ponzi scheme at all. They were investigated in the court in Quebec because the AMF were worried about an international company operating in gold investing without being registered in the province. The court concluded that Karatbars affiliates and customers are not gold investors in the first place, so they are allowed to legally operate there. They also examined the structure, policies, and business statistics of the company (number of customers, affiliates, sales worldwide, etc), and found that Karatbars is perfectly legal and commended them for their solid business model.

    This is why if you check the warning of the AMF on their site, that warning has now been removed.

    Again, please stop helping others with misinformation. Your article is outdated and filled with inaccuracies.

  5. Karatbars is not illegal, as they were reviewed by the court in Montreal and the court judge concluded there was no basis to what the AMF were concerned about. They were concerned that Karatbars offers gold investing when one needs to be registered as an issuer in Quebec. They concluded that Karatbars affiliates and customers are not gold investors, and found all business operations to be completely legal. They will be legally functioning in Quebec starting January 15th 2017.

    Your post is so much filled with inaccuracies, and the writer of the article so uninformed, that it is a disservice to people seeking to make their due diligence.

  6. This information is simply false. You do not need to make a monthly order to generate commissions from Karatbars. I do not know where you have come with this information, but anybody who does a bit of due diligence will find this not to be true. It seems you did not do your research thoroughly.

    Also, there is no such thing as a consumer purchasing gold at “spot price”. Spot price refers to the price of a commodity before delivery and other overhead costs, such as manufacturing, minting, dealership markups, and so on. So the criticism that the gold is above spot price is a ridiculous point.

    If you compare any gold of othet compankes which are LBMA certified and sold by the gram, you will find they all fall in the same price range. Some of these reputable companies are Credit Suisse, Pamp Suisse, UBS, and Argo Hereus. Finally, Karatbars gold comes with various security features to ensure easy selling at a later date. This is called a kinebar, introduced originally by UBS bank in 1993. Only three out of 77 + LBMA certified refineries produce this asset class of gold, so this also has an influence on the price of the gold.

    In conclusion, Karatbars gold is a specific asset class (LBMA certified sold by the gram which is a kinebar). There were three main errors :

    1 – That one has to make a monthly purchase.

    2 – The assumption that ordinary consumers can purchase gold at spot price.

    3 – Not comparing the prices of gold within the same asset class.

  7. I have to disagree with you. Direct selling does not work because the gold is 40% over priced, so PURE affiliates cannot make a dime trying to sell ONE gram bars for $67 when their customers can buy same product for $46. In order to make any money, YOU MUST place a monthly order AND build your left/right leg down line which ALSO MUST do the same. Just like any other pyramid scheme. Take away the product, and move 20 odd dollars per “gram” upwards and the folks above you make money. Typical pyramid.

  8. Timothy,

    The companies you’re talking about which “history shows”, don’t really have a solid product when you look into them. That’s why they need to rely ONLY on a recruitment scheme to keep going. If the product was solid enough, you wouldn’t need to rely on that. With Karatbars – the product is not skin cream, lotions or potions, but something of true value, which is 24 karat gold.

    Government is not shutting the company down, far from it. 120 governments are aware of Karatbars, and what you are talking about in Canada is not a “shut down” at all – but a simple AMF warning for people to practice due diligence because of an unfamiliar international company that is non-Canadian.That is standard due diligence, which is why even the AMF, rather than simply declaring it as a “scam” as you are, are simply saying that they are looking further into it to become better informed.

    Sorry, you have not presented any clear reasoning why this is a scam. Karatbars presents a business opportunity which involves in part recruiting others – not because it is BASED on recruiting others, but because the way the company works is that affiliates find customers or other affiliates. So many companies have a referral program, and present their business as a referral based program to help others promote the business such as Amazon, Mary Kay Cosmetics. Network marketing is a solid business model and has been for years – and that is why there are countless LEGAL companies, who advertise their business opportunity as a referral based program, and they are still LEGAL.

    You’re misinformation and lack of education is not helping people to practice proper due diligence, in my opinion it is only helping to add to the confusion.

  9. History shows, that even companies that have products can be classified as illegal scams by HOW they market their business. As I said, I sat in on a meeting about this company and it was presented as a recruiting scheme. Time will tell, but the Government will shut it down. It’s already beginning up here in Canada. Don’t be fooled, stay far far away from this scheme.

  10. What on Earth are you talking about ? How is it illegal is there is physical gold involved, and people get what they paid for ?

  11. Incorrect, Karatbars is NOT a pyramid scheme at all. A pyramid scheme is illegal because it involves no real product or service, which is obviously not the case here. This company deals with direct selling of 24 karat gold, like any other E-commerce like Amazon or E-bay.

    Second, anybody can sign up with a free account and begin earning commissions, one doesn’t need to get a business package. This aside, the recruitment side of the business is one small part of the business – there are many ways to do the business. You can sign people up exclusively as customers, who purchase grams of gold every week or month, and earn commissions – so this is NOT AT ALL a business which is simply about recruiting others. Also, every affiliate who joins and begins growing his business will eventually also end up saving in gold, because once you earn enough commission – a small part of it will be set aside for the purchase of grams of gold – so every affiliate who develops and grows his business is also a customer.

    Please do proper due diligence by proper research, rather than adding to the misunderstandings that exist in a loud place such as the internet.

  12. True Timothy. There are some legit mlm opportunities out there too, my sister is part of one.

    I didn’t mean to imply that mlms were scams, just that karatbars was an scam of an mlm (make sense?)

  13. I have to take a small issue with your terminology in this article. You use the term “MLM Scam” several times. This “scam” is not MLM, it’s a “recruitment scheme” or “pyramid scheme” which are illegal. MLM, which is Multi-level marketing, is NOT illegal. Your association with it bashes a good industry proven by both the government’s of the US and Canada as “Legitimate Business Opportunities.” Now, I have sat in on a presentation about Karatbars and after having looked at businesses for the past 30 years, I can confidently say it is an illegal recruitment scheme or pyramid scam. It is not MLM because there is no flow of products through the distribution network so it cannot be referred to as such. Thanks

  16. Do yourself a favour and go type in AMWAY or VEMMA on google, AMWAY scam and VEMMA scam will pop up, however these are fully established companies that have been operating for years, these companies are not schemes and have legitimate products.