Topic: Fake-branded bars slip dirty gold into world markets (Read 649 times)

Official stamps might make you feel warm and cozy inside, but this is a longstanding practice. For example, the US government is long known to have melted down personal effects from the German occupation into official US treasury gold bars. This is basically how all conflict gold stolen in wars is treated. Money is treated as money, in other words.

I meant in the way that people kept accusing Bitcoin as easy to counterfeit or launder. We've always made the argument that the same can be said for fiat, this one shows that even gold experts can be fooled.

With the fingerprinting, I wonder if pawnshops are equipped to detect doped gold. If I bought cheap gold bars and found out it's not "real" simply because it's lacking some seals, I'd be worried how I'll dispose it to get my money back. If they are doped but can pass through pawnshops undetected I might try to have them crafted into jewelry.

You can never know what source, or rather area of business the dirty money comes from. They could come from theft. Would you like to buy cheap gold of high purity knowing that it was stolen and then melted to hide its origin?

The so-called fake gold is still real gold, only a fake brand, because if the gold is really fake, then something that is impossible can be found in JPMorgan Chase & Co branskas and it is ironic that JPMorgan Chase & Co. can be deceived like this.

From this news I can conclude that everything that can be used as a place for money laundering, so far we have heard that the blockchain is an alternative to money laundering, but it turns out that even certified gold can be done by falsifying documents or logos / brands.

I am still OK with this, as the only ones who are getting harmed are the major corporations and banks who charge exorbitant fees for their branded bullion bars and coins. The buyer is getting gold bars of a very high purity, supposedly at cheaper rates. He may face some issues while converting the bullion bars to cash, but it is still going to be profitable for him. Another positive is that it may help to remove the monopoly in the global gold market currently being held by major miners and refiners from South Africa, Russia.etc and make the playing field a bit more equal. The buyers will be having more options to choose from and increased supply means that in general the prices will come down.

the headline and "forgery" lede are a bit misleading, as the fraudulent gold bars bleeding into the market are in fact real gold. the purpose of counterfeiting in this case is to launder money by procuring and selling bars that look like they were produced at the world's major legitimate refineries.

the counterfeits are good enough that they've been found in the vaults of jpmorgan chase. i guess gold is pretty good for moving/laundering money after all!


https://www.reuters.com/article/us-gold-swiss-fakes-exclusive/exclusive-fake-branded-bars-slip-dirty-gold-into-world-markets-idUSKCN1VI0DD

Is that really that different though? If mixing is good enough, the coins are as tainted as any other coin on the blockchain. And gold might not be perfect either, if someone really wanted, they could craft traceable gold bars by adding some isotopes or chemical markers. Or just using existing techniques - see here.


I don't think that it's either good or bad for Bitcoin, in grand scheme of things it's irrelevant to Bitcoin.

This story actually showcases one way that gold is superior. Stolen, conflict, or otherwise tainted gold can be melted down and re-stamped. This is much harder to trace than a public blockchain like Bitcoin where every transaction is permanently stored.

With Bitcoin, the best you can do is mix your coin taint with others. With gold, taint can be completely erased.

Meh, wouldn't mind it much though this is good news for bitcoins.

These bars are real gold, they are just stamped with fake refinery stamps.

At least bitcoin isn't easy to counterfeit

Everyone who buys gold should have a simple test kit and if they are purchasing large bars only buy them from a reputable dealer.  I do like bitcoin a lot but I still think gold is a solid hedge because it has held value for thousands of years.

This is one of the things that popular media usually ignore, when they report on Bitcoin and money laundering. The highly regulated Gold industry and trading platforms are not immune to criminal syndicates that knows how to infiltrate these institutions and how to use this to launder their "dirty" money.

The media is quick to point fingers at Bitcoin, but the formal Banking sector and large financial organizations are doing this on a much larger scale, without people even knowing this.

https://www.nytimes.com/2019/04/09/business/standard-chartered-sanctions-violations.html

Common practise by those who buy in the millions, vault owners is to melt down the gold and rebrand it.   I believe thats how its done probably partly to disown any previous ownership, imagine how much gold is controlled during the previous world wars or the fall of various nations, Libya being the most recent with giant reserves as I recall.

but I don't get how it is being used to launder money

the counterfeits are good enough that they've been found in the vaults of jpmorgan chase.

Based on what you said, I could assume that gold business is very bad and this despite the fact that this business is legal and is under state control in every country.  If such a situation exists in the gold market, then what can we talk about the use of cryptocurrency in criminal activity.

but I don't get how it is being used to launder money
aren't gold producers/dealers/trading houses keeping records of their customers?

It is not about fake gold making its way into JP's safe vaults but real gold with fake date and location of birth  

the fraudulent gold bars bleeding into the market are in fact real gold. the purpose of counterfeiting in this case is to launder money by procuring and selling bars that look like they were produced at the world's major legitimate refineries.

the counterfeits are good enough that they've been found in the vaults of jpmorgan chase. i guess gold is pretty good for moving/laundering money after all!

Those who support Bitcoin now have an additional reason to say that crypto is better then gold, just for reason Bitcoin can not be faked in any way except in the case of forks which misleading people to buy some much cheaper coin.

Now we learn that there is gold which we can call legal, and one that comes to the market through illegal channels. For world who wants to have full control in everything nothing can work that way, everything must go through official channels. But what about silver, precious stones, works of art or food, illegal trade and fake things flooded the world to the point that it became a common thing.

I find the reaction of people trying to poke fun of gold not really justified. They act like the bars are not real gold but that's not the case. All bars are 99.99% pure gold-- just the brand stamps are manipulated.

I am amazed with this story. Right now, there is a growing demand of gold as it is originally the safe haven in times of distress and chaos. The perennial demand for gold has been the very reason why unscrupulous personalities can be engaging in fake gold and even use gold to launder illegal money. So it is not anymore true to say that it is Bitcoin that is facilitating money laundering as any asset digital or not can be utilized for this activity.

Wait what? I just know that there is such thing as "major legitimate refineries." In that case, isn't it still worth the same?
I thought gold is fungible.

I think fake (cheap metal) gold is much more common than the previous one. I only know to buy gold with a certificate of authenticity from a local reputable company. Damn, should study more.

Christ, this is always what's scared me about buying gold or silver--it doesn't matter if it's a bar or something like an American Silver Eagle, there are counterfeits floating around that could fool anyone.

the counterfeits are good enough that they've been found in the vaults of jpmorgan chase. i guess gold is pretty good for moving/laundering money after all!

Except several dozen of forked coins, who each claim to be the real Bitcoin.

https://www.forks.net/list/Bitcoin//1/2017-01-01/2020-01-01

If even gold is getting this type of scamming then there is really no point on not going over to blockchain route for everything. If you could just put up like a qr code deal or just some numbers that represents wallets or address on gold bars you can just check those gold bars on each time someone sell it and you can see where it was gotten from. That way if the company that got mimicked by the scammers (I know gold were real gold but the reputation was stolen) they would be able to refute or agree what has happened was actually what happened.

Otherwise we will keep having these type of stuff in all investment stuff, blockchain literally makes sure the owner is the correct one with many stuff like signatures and all which is the exact reason even cash should be tied to blockchain with their numbers.

Other than that, you're correct--no fake bitcoins are running around trying to pass themselves off as the real deal.

the counterfeits are good enough that they've been found in the vaults of jpmorgan chase. i guess gold is pretty good for moving/laundering money after all!

By the way, this is a good argument in favor of the value of Bitcoin, because it can not be faked, filled with something and presented instead of the original, as was done with gold, filling it with tungsten.

LONDON (Reuters) - A forgery crisis is quietly roiling the world’s gold industry.

Gold bars fraudulently stamped with the logos of major refineries are being inserted into the global market to launder smuggled or illegal gold, refining and banking executives tell Reuters. The fakes are hard to detect, making them an ideal fund-runner for narcotics dealers or warlords.

In the last three years, bars worth at least $50 million stamped with Swiss refinery logos, but not actually produced by those facilities, have been identified by all four of Switzerland’s leading gold refiners and found in the vaults of JPMorgan Chase & Co., one of the major banks at the heart of the market in bullion, said senior executives at gold refineries, banks and other industry sources.

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Fake gold bars - blocks of cheaper metal plated with gold - are relatively common in the gold industry and often easy to detect.

The counterfeits in these cases are subtler: The gold is real, and very high purity, with only the markings faked. Fake-branded bars are a relatively new way to flout global measures to block conflict minerals and prevent money-laundering. Such forgeries pose a problem for international refiners, financiers and regulators as they attempt to purge the world of illicit trade in bullion.

High gold prices have triggered a boom in informal and illegal mining since the mid-2000s. Without the stamp of a prestigious refinery, such gold would be forced into underground networks, or priced at a discount. By pirating Swiss and other major brands, metal that has been mined or processed in places that would not otherwise be legal or acceptable in the West – for example in parts of Africa, Venezuela or North Korea – can be injected into the market, channeling funds to criminals or regimes that are sanctioned.

It is not clear who is making the bars found so far, but executives and bankers told Reuters they think most originate in China, the world’s largest gold producer and importer, and have entered the market via dealers and trading houses in Hong Kong, Japan and Thailand. Once accepted by a mainstream gold dealer in these places, they can quickly spread into supply chains worldwide.

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“It’s a wonderful way of laundering conflict gold,” he said. “The gold is genuine, but it’s not ethically sourced ... They look completely genuine, they assay correctly, and they weigh correctly as well.”

The perfect appearance makes the bars highly effective. “Because gold is completely fungible,” Hayes said, “you can bleed it into genuine production. It’s very, very hard to control.”

J.P. Morgan supplies gold from major refiners for many of the world’s biggest banks, jewelers and investors, and the discovery of the forged bars in its vaults triggered a full review of the gold it held, market sources said. One said this sweep unearthed around 50 fraudulently-branded bars. Another said it found several hundred. J.P. Morgan did not comment.