The " Buzz " word of Tokenization is now infecting the Gold/Silver space. U should look at this as an Infectious Disease that is spreading itself into the PM space.
I read a great article a while back about " Tokenization " ( can't find it again ATM ). The article highlighted that the back office of Tokenization is Very Opaque. Just like the back office of Bernie Madoff's investment arm was fully regulated/supervised but in real terms was still very opaque.
The SEC relied very heavily on the " honesty " of investment managers/bankers
to supervise the entire trading/investing/banking sphere. The whole environment is so enormous that the SEC & other regulatory/supervising bodies have no hope at all of managing the Financial/Investing sphere.
Back to Bernie. Bernie did run a successful trading firm, it was when he branched out into " Investment Management " that things turned dark. In fact it turned so dark that Bernie never actually invested into the markets any of the money that was placed with his investment firm. Bernie just paid the investment returns out of new money that was coming in. Plus that more than 90% of clients just rolled their investment returns back into their account made it even easier for Bernie.
The point being that other firms sent inquires to the SEC about Bernie's unprecedented rates of consistent returns & the SEC did investigate. But the investigators just took at face value all the paperwork that Bernie feed to them. It wasn't until redemption surpassed cash in the bank that Bernie's Ponzi Scheme fell apart.
The main point though is that " Tokenization " has the same blind spot. The blind spot is that the regulator/supervisors of the whole area rely on the reporting that the " Managers " send to them to be an honest accounting. As long as no obvious red flags are raised then everything just sails along.
So when Gold/Silver is tokenized, the issuers behind the tokens are supposed to actually have the Gold/Silver that is backing their tokens. So if u have invested into tokens & suddenly the issuer is found to be a fraud then all the money u invested into those tokens disappears into the financial black hole, the same black hole that Bernie's customers funds disappeared into.
Mmm, me. I think I will just stack my physical PM's. A 125% return on investment over the last 5 yrs is ok with me
I read a great article a while back about " Tokenization " ( can't find it again ATM ). The article highlighted that the back office of Tokenization is Very Opaque. Just like the back office of Bernie Madoff's investment arm was fully regulated/supervised but in real terms was still very opaque.
The SEC relied very heavily on the " honesty " of investment managers/bankers
to supervise the entire trading/investing/banking sphere. The whole environment is so enormous that the SEC & other regulatory/supervising bodies have no hope at all of managing the Financial/Investing sphere.Back to Bernie. Bernie did run a successful trading firm, it was when he branched out into " Investment Management " that things turned dark. In fact it turned so dark that Bernie never actually invested into the markets any of the money that was placed with his investment firm. Bernie just paid the investment returns out of new money that was coming in. Plus that more than 90% of clients just rolled their investment returns back into their account made it even easier for Bernie.
The point being that other firms sent inquires to the SEC about Bernie's unprecedented rates of consistent returns & the SEC did investigate. But the investigators just took at face value all the paperwork that Bernie feed to them. It wasn't until redemption surpassed cash in the bank that Bernie's Ponzi Scheme fell apart.
The main point though is that " Tokenization " has the same blind spot. The blind spot is that the regulator/supervisors of the whole area rely on the reporting that the " Managers " send to them to be an honest accounting. As long as no obvious red flags are raised then everything just sails along.
So when Gold/Silver is tokenized, the issuers behind the tokens are supposed to actually have the Gold/Silver that is backing their tokens. So if u have invested into tokens & suddenly the issuer is found to be a fraud then all the money u invested into those tokens disappears into the financial black hole, the same black hole that Bernie's customers funds disappeared into.
Mmm, me. I think I will just stack my physical PM's. A 125% return on investment over the last 5 yrs is ok with me
