The Karatbit Foundation has just received an order from the German Federal Financial Supervisory Authority (BaFin), with instructions to cease and desist any activity its currently handling in the country, that has not been properly authorized. According to an announcement from BaFin, the company is expected to “wind up the electronic money business” it’s currently conducting in Germany.

BaFin is accusing the foundation of floating a KaratGoldCoin (KBC) cryptocurrency, without receiving proper regulatory approval from the supervisory authority. Karabit supposedly gives users the opportunity to easily handle trade transactions using gold, as well as also allowing the easy exchange of gold for digital currencies. BaFin’s order means that all of this must stop and the issuance must be “wound up.”

Founded by Harald Seiz back in 2011, the company is also accused of running a pyramid scheme as it sells its gold tokens to interested people who seek to join its community, and who must then sign up others and be paid for it. Seiz has however revealed that the company has a Miami-based crypto bank as well as a gold mine in Madagascar with assets worth €900m (roughly $995 million) and uses these assets to allay any worries or fears.

The company has also previously used images of former soccer players including Roberto Carlos, Lothar Mattäus and Patrick Kluivert for promo, supposedly without their permission.

Last year, Germany’s Ministry of Finance said that it will not tax people who are willing to pay for goods and services using Bitcoin.

Image Credits: Pixabay

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