China’s Wuhan Kingold Jewelry used at least 83 tonnes of counterfeit gold as collateral for loans

According to the Chinese news outlet Caixin, Wuhan Kingold Jewelry – the largest privately-owned gold processor in central China’s Hubei province – used at least 83 tons of fake gold as collateral for a loan of up to 20 billion yuan ($ 2.8 billion ) from more than a dozen Chinese financial institutions.

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Uncovered one of the most significant gold – Kingold Jewelry – counterfeiting scandals in recent history

Kingold was founded in 2002 by Jia Zhihong, who contributed served in the military and once managed gold mines owned by the People’s Liberation Army. Kingold started as a gold factory affiliation with the People’s Bank of China but split off from the central bank during restructuring. As of September 2019, it held assets totaling $ 3.3 billion, and its shares are listed on the Nasdaq stock exchange.

According to the report, counterfeit collateral is equivalent to 22% of China’s annual gold output and 4.2% of the state’s gold reserves as of 2019. In short, more than 4% of China’s official gold reserves Quoc can be fake.

The counterfeit metal was discovered in February when one of Kingold’s lenders, Dongguan Trust, decided to liquidate its collateral to cover defaulted debts. Following the discovery, three other Kingold creditors also performed tests on the gold in their vaults and found it was fake.

This is not the first time fake gold has been used as collateral in China. In 2016, regulators found gold bars with black tungsten at their centers, supporting a 19 billion yuan ($ 2.5 billion) loan.

A government task force has been set up to continue fraud investigations.

But the latest revelations will undoubtedly raise questions about how much gold is held as collateral and how gold is, in fact, a reserve asset. In the last four years, at least $ 50 million worth of fake gold allegedly from Swiss refineries has been found in the vaults of JPMorgan Chase, one of the largest banks at the center of the bullion market.

Cryptocurrencies often get a bad rap for scams, but finding out if it is fake or not; The software can scan the Bitcoin to prove its accuracy. This process costs almost nothing.

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