The Wuhan Gold Scam

The city of Wuhan in China is infamously known for being the epicenter of the COVID-19 pandemic.

But it's also the home base of a NASDAQ-listed company, Kingold Jewelry, currently in the midst of one of the biggest gold scams in history. The company originally started as a gold processing factory and quickly ended up one of the largest jewelry manufacturers in China.

But their growth was fueled by debt, a lot of debt.

Kingold started in 2013 pledging its gold reserve as debt collateral to raise cheap debt. By 2019 they had pledged 2.7 million ounces (or 83 tons), worth north of 4 billion dollars!

Above: a chart of Kingold Share price

Ultimately, Kingold failed to repay the debt they owed, and its creditors seized the gold pledged as collateral.

But when they tried to sell it to cover their loss, they quickly realized that it was not gold bars they had in their possession but copper bars wrapped in gold foil!