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Nasdaq-Listed Company Sued for Backing $2 Billion Loans With 83 Tons of Fake Gold

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The Nasdaq-listed company that allegedly used 83 tons of fake gold bars as collateral to secure loans worth about $2 billion from multiple financial institutions in China is now in default and facing several class-action lawsuits.

$2 Billion Fake Gold Scheme Unravels

The gold industry was recently shaken when it was discovered that a U.S. publicly-traded company was allegedly using 83 tons of fake gold bars to secure loans worth $2 billion in China. Kingold Jewelry Inc. is based in Wuhan, China, but it is listed on Nasdaq in the U.S. under the ticker symbol KGJI.

Following the fake gold news, the Chinese jeweler informed Nasdaq in a filing that it had received default notices of approximately RMB 10 billion ($1.44 billion) from seven Chinese lenders. These loans were backed by the gold bars found to be gilded copper alloy. The Shanghai Gold Exchange (SGE) has also terminated Kingold’s membership and Chinese authorities have launched a fraud investigation into the company.

Furthermore, a number of lawsuits have been filed against Kingold as the company’s stock price plummeted 24.11% on June 29 following the fake gold reports. One class-action lawsuit was filed by The Rosen Law Firm with the U.S. court for the Eastern District of New York for violations of federal securities laws. It names Kingold, its chairman Jia Zhihong, and former CFO Bin Liu as the defendants, claiming that they operated the company fraudulently and deceived investors.

Nasdaq-Listed Company Sued for Backing $2 Billion Loans With 83 Tons of Fake Gold
Kingold Jewelry’s stock price chart on Nasdaq as of Aug. 7 showing a steep decline around the time the media reported the company using fake gold bars to secure about $2 billion in loans.

Law firms Pomerantz and Bronstein, Gewirtz and Grossman also filed a class-action lawsuit against Kingold, its CEO, and former CFO. The complaint alleges that between March 15, 2018, and June 28, the company made materially false or misleading statements about its operations, specifically about using “fake gold as collateral to fraudulently secure loans.” It also failed to disclose material consequences that “the company would face creditor lawsuits and be delisted from the Shanghai Gold Exchange,” law firm Pomerantz described.

In a July filing with the U.S. Securities and Exchange Commission (SEC), Kingold declared that its Wuhan operations “have been significantly impacted by the disclosed loan defaults, related loan disputes, various legal proceedings and the resulting freezing of bank accounts.” Furthermore, the company’s jewelry production was halted between January and early April due to the covid-19 outbreak and Wuhan’s lockdown.

To help small investors in China recoup investment losses from large companies, the Chinese supreme court last week green-lighted a historic class-action lawsuit system for retail investors. The system will be a “convenient and low-cost claim channel” for small and medium volume investors and form a strong deterrent to financial criminals, the supreme court reportedly said in a statement.

China’s market regulators are investigating Kingold Jewelry over the fake gold allegation, calling for stricter risk management. “A number of banking, insurance and trust institutions were involved in the Wuhan Kingold Jewelry fake gold incident,” the China Banking and Insurance Regulatory Commission said. “Other than the problems associated with the company itself, the incident also revealed that the internal controls and risk management of some financial institutions were empty shells.”

What do you think about Kingold using fake gold as collateral? Let us know in the comments section below.

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Image Credits: Shutterstock, Pixabay, Wiki Commons, Nasdaq

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Source: https://news.bitcoin.com/nasdaq-listed-company-sued-backing-2-billion-loans-with-83-tons-fake-gold/

Blockchain

Swipe’s SXP Token Jumps Over 25% Ahead of Swipe Governance Mainnet Deployment

The price of Swipe’s SXP token has jumped well over 25%, from $1.29 to $1.65 at press time, after Swipe Governance’s (SG) smart contracts were successfully audited by CertiK and SG’s mainnet deployment started being prepared. According to an announcement posted on Twitter, Swipe Governance’s smart contracts were successfully audited by CertiK, and Swipe Governance’s […]

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The price of Swipe’s SXP token has jumped well over 25%, from $1.29 to $1.65 at press time, after Swipe Governance’s (SG) smart contracts were successfully audited by CertiK and SG’s mainnet deployment started being prepared.

According to an announcement posted on Twitter, Swipe Governance’s smart contracts were successfully audited by CertiK, and Swipe Governance’s mainnet is now scheduled to be deployed on Friday, October 2.

The tweet points out that the Swipe Governance protocol will allow SXP token holders to vote and control various paraments of the cryptocurrency’s development via the Swipe network.

Responding to the announcement some users touted their faith was restored in the project and they are now “super bullish” on it. Notably, others pointed out that the news appeared to have been leaked somewhere, as before the official announcement the price of the SXP token started surging.

The code behind the Swipe Token itself had notably already been audited by CertiK. In an announcement published last year, Swipe pointed out the audit was meant to ensure the SXP token would be “secure against some of the most critical vulnerabilities.”

The token, the team wrote, is the “center piece of network fuel and access to receiving the services provided by Swipe.” The announcement details CertiK conducts audits using Formal Verification, which goes beyond checking for bugs and vulnerabilities and “leverages rigorous mathematical theorems to check whether the source code of a program meets its specification.”

The Swipe Governance audit announcement saw SXP’s price jump to over $1.8 before the token’s price started correcting. The token hit an all-time high of $4.3 back in August, one month after leading cryptocurrency exchange Binance acquired Swipe for an undisclosed sum.

Source: CryptoCompare

Binance acquired Swipe and listed the SXP token back then. The cryptocurrency exchange’s acquisition of the firm appears to be related to its Binance Visa Card, a cryptocurrency debit card that lets users pay with crypto anywhere Visa is accepted.

The Binance Visa Card uses Swipe’s technology and rolled out to users in the European Economic Area earlier this month.

Featured image via Pixabay.

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Bitcoin Closes Above $10,000 for a Record 63 Days Straight

Bitcoin (BTC) continues to break new ground. According to data aggregated by Messari, on Sunday, 27 Sept., it broke another record — closing at $10,793, thus making it 63 consecutive daily closes above the $10,000 handle. The current streak eclipses the previous record of 62 days, which lasted from Dec 1, 2017 – Jan 31, […]

The post Bitcoin Closes Above $10,000 for a Record 63 Days Straight appeared first on BeInCrypto.

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Bitcoin (BTC) continues to break new ground. According to data aggregated by Messari, on Sunday, 27 Sept., it broke another record — closing at $10,793, thus making it 63 consecutive daily closes above the $10,000 handle.

The current streak eclipses the previous record of 62 days, which lasted from Dec 1, 2017 – Jan 31, 2018, a period during which bitcoin reached its all-time high of just above $19,900.

Bitcoin’s latest extended consolidation above the five-digit mark, however, is proving different than previous runs. This time around, there is less hype, and in terms of price, things are relatively quiet, mostly fluctuating between $10,000 and $12,500.

In fact, the 180-day return volatility for the world’s premier cryptocurrency has dropped nearly 50% in September, per Coin Metrics.

During the last three months, any dips under 10k were aggressively bought. And according to The Crypto Lark, this is evidence of “halving effects starting to be felt.” In reaction to the news, the co-founder of Morgan Creek Digital and well-known podcaster Anthony Pompliano, for his part, tweeted:

Striking a slightly different tone, Matt Kaye, the managing partner of Blockhead Capital, commented,

we are essentially at $11k with no euphoria. No derivative long build-up. High stablecoin balances. Shorts are still unwinding. The sentiment is cautious at best (justifiably so with macro backdrop). Appreciate the rarity of this moment.

The broken record occurred around the same time it came to light that investment firm Grayscale was again adding to its Bitcoin Trust. At current prices, the additional investments are said to be about 17,100 BTC, worth approximately $186 million.

Meanwhile, bitcoin’s price is approaching a crucial resistance area, a breakout above which could confirm that the trend is bullish. For more in-depth Bitcoin analysis, click here.

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Source: https://beincrypto.com/bitcoin-closes-above-10000-for-a-record-63-days-straight/

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Optimism For Ethereum as Layer 2 Testnet Gets Launched: What Does It Mean?

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Layer 2 scaling developers at the Plasma Group have recently announced the launch of their Optimistic Ethereum testnet, which will be deployed on projects to test much needed scaling solutions.

Essentially, Layer 2 scaling involves taking work off the root chain to process data and transactions faster. The team has built a system called OVM, a fully-featured Ethereum Virtual Machine (EVM) compliant execution environment designed for L2 systems.

The OVM was first tested on Uniswap’s Unipig L2 decentralized exchange launched as a demo in late 2019.

Synthetix The First Guinea Pig

The Optimistic Ethereum testnet will be rolled out in several phases bringing early adopters on gradually so that the team can individually support each project.

On-chain synthetic assets DeFi protocol Synthetix will be the first to trial the scaling solutions offering 200,000 SNX in rewards to their users for participating. The team added that the testnet is currently open for public use, but not yet for public contract deployment as there will be bugs that need ironing out first.

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Phase A of the testing will involve airdropped tokens that will allow participants to mint and burn sUSD, the Synthetix native stablecoin, and claim staking rewards. This will be done using the Görli Ethereum testnet.

Phase B will enable deposits and include an airdrop of Layer 1 Görli SNX tokens to participants who can increase their stakes if they perform a deposit. Phase C will allow withdrawals, and participants must complete a successful withdrawal to receive their testnet rewards on the mainnet.

Optimistic Ethereum is the only generalized L2 solution for Ethereum, which means that it does not require specific functionality to be built to support existing L1 protocols.

Synthetix posted a guide for users wanting to take part in the tests, stating;

“This is a huge milestone for Synthetix, Optimistic Ethereum, and indeed the entire Ethereum space.”

Ethereum Fees Update

A week after the digital dust has settled from the Uniswap airdrop and UNI launch, gas fees have fallen back a little. From a high of almost $12 on September 17, the average transaction fee has fallen back to around $2.75, according to Bitinfocharts.

This is still way too high, though, and it is hoped that many more Layer 2 solutions will be deployed to DeFi protocols over the coming months so that they can remain on Ethereum. The ETH 2.0 scaling upgrade is still at least a year away, so efforts such as Optimistic Ethereum could become its savior until then.

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Source: https://cryptopotato.com/optimism-for-ethereum-as-layer-2-testnet-gets-launched-what-does-it-mean/

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