• June 2nd, 2020

Karatbars the latest pyramid scheme identified by Bank of Namibia

WINDHOEK – The Bank of Namibia (BoN) continues to clamp down on dubious financial schemes operating in the country which, more often than not, prey on vulnerable Namibians during tough economic times. The latest decision affects Karatbars International, which BoN has declared a pyramid scheme thereby deeming it illegal to operate in the country. 

Karatbars International is described as an e-commerce company specialising in the sale of small gold bars and gift items in gold bullion. However, in a recent statement, BoN’s spokesperson, Kazembire Zemburuka, noted that Karatbars’ participants in the business are encouraged to introduce new members to a referral network to earn monetary rewards and progress in status. “Funds allocated to participants as part of the reward system principally come from the joining fees received from newly recruited members,” Zemburuka noted. 

The Banking Institutions Act, 1998 (Act No. 2 of 1998), mandates BoN to investigate persons or businesses whose business activities and operations are suspected of contravening the Banking Institutions Act, especially sections 5 and 55A of the Act. In carrying out this mandate, the Bank investigated the business operations of Karatbars International to establish whether its business activities constitute a pyramid scheme in terms of section 55A of the Banking Institutions Act, as amended.  

The outcome of the investigation by the BoN has revealed that the business activities of Karatbars contravene section 55A of the Act as members’ income is earned based on the successful recruitment of new participants to purchase new small gold embedded cards for which money is accepted as a regular feature of joining the business.  

“The business practice does not have tangible products for sale to prospective members or affiliates, except for the small gold embedded card. The fees paid for the small gold embedded card is used to render legitimacy to the business practice. 
"However, the real attraction of new participants to Karatbars is not the purchase of the gold card, but the desire to earn money through the introduction of new members to the business practice,” Zemburuka explained. He noted that the business practice is not sustainable without the continuous recruitment of new participants who are eligible to pay a joining fee.  

BoN has therefore advised promoters and participants of Karatbars to stop conducting such business activities. The promoters are further advised to refrain from recruiting new members on the promise of earning a commission for recruiting new members to the business.  

“Should Karatbars and its promoters wish to continue with the sale of gold embedded cards and gold related products, then such products should be sold directly to customers. The products should also be the primary source of income, that is, the commission should be earned based on the products sold, and not on the recruitment of new members as is currently the case,” Zemburuka stated. 


Staff Reporter
2019-05-07 09:34:24 | 1 years ago


  1. User
    P M

    I will not comment about BoN other than to say that somehow they have this whole thing upside down. I urge everyone find out for himself or herself. It cost nothing to do this, but many of us prefer to listen to the so-called experts. I am not an expert, but here is what I know about this matter. Helpful links below: 1. https://www.forbes.com/sites/joresablount/2019/05/31/10-blockchain-companies-to-watch-in-2019/#28d3b39c543f 2. https://www.forbes.com/sites/steveforbes/2019/06/25/open-letter-to-mark-zuckerberg/#2d21543a2614 3. https://k-booster.info/lpr300755l2261b210 Karatbars was founded in 2011 with the single objective of enabling the working class to protect their wealth through gold, call it a gold savings bank with a twist towards financial inclusion if you may. As we all might know, holding gold has been the preserve of the ultra-rich and I am sure many rich Namibians have invested their millions on the worldwide gold market. Well now, everyone can do the same starting out with a mere NAD85. This directly challenges the traditional commercial banking system, so central banks are very quick to negatively label these “innovative” technology platforms. Bitcoin of course being the worst victim of this negative labeling….last time I checked 1 Bitcoin is worth USD12,000. SMH Okay, so why do ultra-rich put their money in gold? To protect themselves against inflation and whimsical monetary policies. Think about it, If you had NAD85,000,000, would you put it in a commercial bank? I doubt it and indeed those who have that sort of money do not put it in commercial banks. They find some financial instrument, gold being one of them and they bury their loot there. Unfortunately, the working class has never had access to such financial instruments, because it requires so much money to participate. So we have been relegated to the commercial banking system, which only serves to enrich the bankers. So let us investigate the NAD in the past two years. The NAD has lost value against the world’s top currencies. Example the USD https://www.xe.com/currencycharts/?from=NAD&to=USD&view=2Y. To bring it closer to home, the number of tomatoes you buy today for NAD10 do not equal the number you got in 2017. That means your paper is worth less…no pun intended. Ah yes that nasty phenomenon known as inflation (incidentally, central banks controls that through macroeconomic experimentation). Gold has for decades outperformed the world’s top currencies and beaten inflation. Example USD: https://www.xe.com/currencycharts/?from=XAU&to=USD&view=2Y At Karatbars, anyone, anywhere in the world can open up a free gold savings account and start saving. Yes free account! After setting up the free account, one does not need NAD85,000,000 to start saving, just a mere NAD85 and one does it at their own pace. No forced payments, no hidden daily or monthly fees, no commitments…nothing. In addition to the original savings platform, Karatbars has introduced a crypto currency backed by physical gold, an exchange, a payment system, merchant services and owns a banking license in the United States and Singapore all running on their Blockchain starting on October 2019. It is true, every single one of the 700,000 customer at Karatbars is rewarded for referring new customers, but that is not the primary focus of the platform. There are participants that focus on recruitment, as means of earning extra income, but hey, that is okay, those are Karatbars are known as sales representatives in traditional markets and they make an extra buck promoting the company. That is what sales people do. If one of the commercial banks in Namibia, recruited sales people or incentivized customers (which they would never do ) for suggesting the bank to the rest of the world, BoN would not call that a pyramid scheme. Anyway, I have shared what I know, but I do not speak on behalf of the company. I am not a Namibian though I have been to Namibia twice, and they probably will not let me next time after this submission. I use the platform I am happy with the results even without any recruitment income thus far. Karatbars is going to be big folks do not listen to so-called experts do your own research. No one has to sell it to you and you do not have to sell it to anyone. I hope this is helpful.

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