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Gold: Huge Scam 83 tons never existed

Within the first six months of 2020 we have seen two major gold scams. And these are just the ones that have been detected. From fake gold to identity theft.

fake gold

Within the first six months of 2020 we have seen two major gold scams. And these are just the ones that have been detected.

 Back in March 2020 gold spiked to around $1670, the highest level since 2013 and of course this encouraged scammers to masquerade as legitimate gold trade, their ever elaborate schemes designed to dupe unwary investors, and their advancements in counterfeit products.

The internet has become a significant tool for those wishing to hide their identity whilst they scam millions from unsuspecting clients. In times of uncertainty, novice traders seek to cover potential losses by investment, and often find themselves prey to the unscrupulous scammers.

The Gold Scams

It’s almost like taking money from a baby. The internet can provide a market place in which goods are sold to unsuspecting customers but are either never delivered or have been grossly overestimated.

False advertising of secure storage aka ‘The empty safe scam’ for precious metals as well as unwise investments designed to hoodwink even experienced traders are just the tip of the iceberg.

In 2019 there was a ‘mule’ scam in the U.S. A dating website was used to draw in the naïve. Those dreaming of romance were duped into ordering gold under the assumption that it was required to get their intended to the U.S. 

Counterfeiting and fraud have been transformed by technology. With technical advances available to everyone, fake gold can be much harder to detect and customers only realise their mistake when they attempt to sell the product on.

Gold

June 2020

As recent as June 2020 a broad gold scam seems to have come to light. A Chinese jewellery company that was listed on NASDAQ appears to have been involved in a major gold counterfeiting scandal. Apparently the company produced a loan scheme that was aimed at several Chinese banks and trust companies where gold was used as collateral.

Some of the bars of gold were gilded copper whilst a further 83 tons of the gold never really existed at all.

This fraudulent scheme was worth $2.8 billion. When the company’s shift in direction left the money lenders responsible for the outstanding 16 billion Yuan of loans against the counterfeit bars.

Times are changing

Apprehension about the gold reserves in the major central banks has arisen. The suggestion that they may also be tainted with other metals has resulted in a lack of confidence in gold.

There is now uncertainty as to the authenticity and genuine value of gold. As a result, investors are looking for a more reliable and reasonably safe alternative to the historic dependency on precious metals as base currencies.

Fiat currencies are not worth the paper they are written on as they are backed by ‘hope’, ‘belief’ and ‘thin air’ therefore the most popular choice amongst the savvy investors is Bitcoin.

The Bitcoin network is based on a pre-defined mathematical algorithm and is run by a large group of miners distributed worldwide, the network requires 51 per cent of miners to mine and validate a false token, and therefore it nullifies any attempt to create counterfeit Bitcoin. This is certainly an attractive prospect given the history of gold and fiat currencies.

Identifying online investment scams

Although Bitcoin and other cryptocurrencies are counterfeit resistant, they are not bulletproof when it comes to online scams.

Cold calls

Unsolicited online ‘cold calls’ are one of the most common ways that scammers contact their ‘mark’. This could be via e-mail or private chat in social media. Always remember that those with genuine investment opportunities will want to be transparent. They have nothing to hide and will make an offer to a group, not just one individual.

Fraudulent opportunists

A more sophisticated method of attracting a ‘mark’ is online advertising. This can be relatively cheap and not well regulated. Low returns of around 2-3% on investment can simply show that they are trying to appear legit, so always check them out.

False Identities

Genuine entrepreneurs can take years to build up a trustworthy reputation only to have a scammer steal their identity. The scammer will then attempt to attract customers with false credentials, not only defrauding the ‘sucker’ but also damaging the reputation of the honest businessperson.

Ben Gillott at Moocharoo.ninja explains his experience of identity theft and informs his followers about the need for transparency in his YouTube video ‘Fake Bitcoin Generator’.

If a well-established business director contacts you in person through e-mail or messenger, be that Facebook, Twitter, Telegram or What’ Sapp offering you an investment opportunity you can be 99.9% sure it’s is a scam!  

‘Stealth’ fees

Some companies may be regulated by financial authorities but their fee structure is so complicated that an investor will have no way of keeping track and will get stung by ‘Stealth’ fees.

Due to crypto’s unregulated nature, the new kid on the block is particularly vulnerable to this scam. So always look into a company’s fees and if they seem unreasonable or overly complicated stay clear!

Remember the wise will win, the naïve may learn the hard way, but there is no cure for stupidity.

BNA

Disclaimer: Opinions expressed at Bitcoin News Agency are not investment advice. Investors should do their own thorough research before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any loses you may incur are your responsibility. Bitcoin News Agency does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Bitcoin News Agency an investment advisor. Please note that Bitcoin News Agency participates in affiliate marketing.

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