PAX Gold (PAXG) way to own investment-grade physical gold, true?

JohnLocke said:

Through another thread, I became acquainted with the PAX GOLD (PAXG) cryptocurrency, which is backed by physical gold as they at least advertise on their website.

Is there anyone who knows more about this company or if there is anything to consider before starting to invest in this cryptocurrency?

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well, having had quite a few years long look into these, my long story short. I cannot come up with a decisive outcome.
It ultimately boils down to a "trust me bro" in the end.
Theres paxos.
Theres also cache gold, ultimately there the same applies and its "trust me bro".
Finally theres also tether gold xaut.

Another problem is regulatory risk. Since its centralized, it can just be shut down like that (liberty reserve and such). The beauty of Bitcoin can be seen in full because no external peg needs to be maintained whatsoever.

"
CACHE Gold, established in 2018, embarked on a mission to digitize gold through the issuance of fungible ERC-20 tokens, utilizing the GramChain asset tracking system. This innovative approach offered a transparent and fully backed solution, providing real-time and tamper-evident Proof of Reserve (PoR).

Recent regulatory changes and proposed amendments are expected to significantly increase our compliance and administrative costs, rendering the issuance of new gold backed tokens in Singapore unfeasible. In light of these developments, CACHE Gold has made the difficult decision to enter indefinite dormancy. This move is aimed at addressing the operational complexities arising from the recent and potential regulatory shifts. Our primary focus during this period of dormancy will be to facilitate the redemption/conversion of any remaining tokens.

If you hold any outstanding CGT, please contact us at [email protected] for guidance on CGT redemption/conversion.

CACHE Gold has consistently maintained more than 100% backing for its tokens and possesses adequate net assets to responsibly close operations, settling all liabilities. We have actively reduced outstanding tokens and hold only a minimal number of third-party tokens.

We deeply regret being unable to realize our vision of issuing highly transparent public blockchain gold tokens.
"

Just because I got curious, I've put $10,000 into Pax Gold. Now let's see if it grows or vanishes.

By the way, a really good and interesting topic. Buying gold with crypto without having to physically store it.

JohnLocke said:

Yes, that's why it is good to discuss such coins, I didn't considered the regulatory risk which indeed can be significant these days.

I very well remember Liberty Reserve back in time.

Just like it always goes, the same rule applies here: never put in more money than you can handle losing. And just to be clear, this coin isn't a safe bet either!

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yes i guess that hits the nail well.
Its maybe a good way supplementing usdt for like 1 month storage or so.

JackAlabama said:

well, having had quite a few years long look into these, my long story short. I cannot come up with a decisive outcome.
It ultimately boils down to a "trust me bro" in the end.
Theres paxos.
Theres also cache gold, ultimately there the same applies and its "trust me bro".
Finally theres also tether gold xaut.

Another problem is regulatory risk. Since its centralized, it can just be shut down like that (liberty reserve and such). The beauty of Bitcoin can be seen in full because no external peg needs to be maintained whatsoever.

"
CACHE Gold, established in 2018, embarked on a mission to digitize gold through the issuance of fungible ERC-20 tokens, utilizing the GramChain asset tracking system. This innovative approach offered a transparent and fully backed solution, providing real-time and tamper-evident Proof of Reserve (PoR).

Recent regulatory changes and proposed amendments are expected to significantly increase our compliance and administrative costs, rendering the issuance of new gold backed tokens in Singapore unfeasible. In light of these developments, CACHE Gold has made the difficult decision to enter indefinite dormancy. This move is aimed at addressing the operational complexities arising from the recent and potential regulatory shifts. Our primary focus during this period of dormancy will be to facilitate the redemption/conversion of any remaining tokens.

If you hold any outstanding CGT, please contact us at [email protected] for guidance on CGT redemption/conversion.

CACHE Gold has consistently maintained more than 100% backing for its tokens and possesses adequate net assets to responsibly close operations, settling all liabilities. We have actively reduced outstanding tokens and hold only a minimal number of third-party tokens.

We deeply regret being unable to realize our vision of issuing highly transparent public blockchain gold tokens.
"

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So at the end when they shut operations they still paid out everything in physical gold as far as I understood.

Or...?

Paxos, the entity behind PAXG, is a US based entity. And supposedly they hold gold bars of Russian origin:



Where are these gold bars stored exactly? Still in Russia? That would be very odd for sure.

You can check by yourself by copying the main PAXG adresses of etherscan to the Paxos tool to locate the gold bars:



They claim it's all in LBMA vaults but you would have to trust their words and that it's not some rehypothecated bars.

Rotor said:

Paxos, the entity behind PAXG, is a US based entity. And supposedly they hold gold bars of Russian origin:

Brand Code The Open Joint Stock Company The Gulidov Krasnoyarsk Non Ferrous Metals Plant OJSC Krastsvetmet Krasnoyarsk Russia

Where are these gold bars stored exactly? Still in Russia? That would be very odd for sure.

You can check by yourself by copying the main PAXG adresses of etherscan to the Paxos tool to locate the gold bars:

https://etherscan.io/token/0x45804880De22913dAFE09f4980848ECE6EcbAf78#balances

Pax Gold - The Safest Way to Own Gold

Pax Gold. The easiest way to own or trade gold. All Pax Gold tokens are backed 1:1 by ounces of London Good Delivery bars held in Brink's vaults.

paxos.com

They claim it's all in LBMA vaults but you would have to trust their words and that it's not some rehypothecated bars.

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I am a total noob when it comes to regulations but doesn't "regulated by the New York State Department of Financial Services" give some credibility?

Also which one do you think is more reliable, Tether gold or Pax Gold?

Probably a good idea to split risk between the two, other than that Tether gold sounds to me at least as safe as Tether USDT stables.

worthless because of their jurisdiction when a goldban acccures

This gold is being registered/reported for a reason

pastet89 said:

I am a total noob when it comes to regulations but doesn't "regulated by the New York State Department of Financial Services" give some credibility?

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In my opinion it's closer to a license to steal with total impunity (remember Blockfi, Voyager, Genesis and others).
Backed gold cryptos are always tricky I find and the US regulated brand just doesn't cut it anymore (on the contrary it just brings infinite burden without any solid guarantees).

pastet89 said:

I am a total noob when it comes to regulations but doesn't "regulated by the New York State Department of Financial Services" give some credibility?

Also which one do you think is more reliable, Tether gold or Pax Gold?

Probably a good idea to split risk between the two, other than that Tether gold sounds to me at least as safe as Tether USDT stables.

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i bet on tether gold, if i was forced to.

pastet89 said:

So at the end when they shut operations they still paid out everything in physical gold as far as I understood.

Or...?

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yep, the operation was not fraudulent or smth along that line.
But even then reg risk can catch you and shut the thing down and no idea how long it takes until all is distributed and shipped across borders.

JackAlabama said:

cache gold

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Cache Gold is gone...

Occurred around the time the Chinese were laundering into Singapore, so the AML division in Singapore started pushing through new laws into the all assets and that seeped into metals and Cache didn't make enough money to cover the increased overheads so ceased ops.


PAXG is 'ok' only issue.

- Gold Ban Potential Seizure.
- Gold Can't be converted to physical redemption easily due to the size of the bars.
- On-Chain Blacklist/Freezing (think potential forced KYC).

Tether Gold | I'd steer clear of.

JackAlabama said:

yep, the operation was not fraudulent or smth along that line.
But even then reg risk can catch you and shut the thing down and no idea how long it takes until all is distributed and shipped across borders.

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Can confirm they had no issues settling of redemption on ceased operations.

- No fraud.

Also arguably their technology was pioneering.

Quite a few new ones have sprung up.

But in a world of sovereign defaults and authoritarian rule - and the collapse of Switzerland as a safe haven - that leaves very few jurisdictions that can protect by rule of law whilst having also a military sting if confronted - namely that leaves Singapore - and I’d recommend only physical bullion opposed to on-chain in the world we are living.

wellington said:

Cache Gold is gone...

Occurred around the time the Chinese were laundering into Singapore, so the AML division in Singapore started pushing through new laws into the all assets and that seeped into metals and Cache didn't make enough money to cover the increased overheads so ceased ops.


PAXG is 'ok' only issue.

- Gold Ban Potential Seizure.
- Gold Can't be converted to physical redemption easily due to the size of the bars.
- On-Chain Blacklist/Freezing (think potential forced KYC).

Tether Gold | I'd steer clear of.


Can confirm they had no issues settling of redemption on ceased operations.

- No fraud.

Also arguably their technology was pioneering.

Quite a few new ones have sprung up.

But in a world of sovereign defaults and authoritarian rule - and the collapse of Switzerland as a safe haven - that leaves very few jurisdictions that can protect by rule of law whilst having also a military sting if confronted - namely that leaves Singapore - and I’d recommend only physical bullion opposed to on-chain in the world we are living.

Click to expand...

Why avoid Tether Gold?

Do you think it's less reliable than Tether USDT?

I wouldn’t be buying gold in say the EU, UK, US.

Friend recently (6 months back) converted his entire life savings into gold in Europe.

Didn’t seem to understand it’s trapped in the system and he should have moved his funds to Asia where he lives and has lived for 25 yrs - and convert to physical.

If there is a gold seizure in Europe it will be seized and with the debts and collapse of the EU pretty much set - I can’t see how he will have anything but a worthless claim at the relevant time.

Others say the caymans - that’s on Americas doorstep - in a chaotic world those will be seized.

Others say Dubai - perhaps - I think it’s generally against Islam to steal - so that will be tested.

pastet89 said:

Why avoid Tether Gold?

Do you think it's less reliable than Tether USDT?

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Because either their record search system isn’t in sync, or they are not backed.

wellington said:

Cache Gold is gone...

Occurred around the time the Chinese were laundering into Singapore, so the AML division in Singapore started pushing through new laws into the all assets and that seeped into metals and Cache didn't make enough money to cover the increased overheads so ceased ops.


PAXG is 'ok' only issue.

- Gold Ban Potential Seizure.
- Gold Can't be converted to physical redemption easily due to the size of the bars.
- On-Chain Blacklist/Freezing (think potential forced KYC).

Tether Gold | I'd steer clear of.


Can confirm they had no issues settling of redemption on ceased operations.

- No fraud.

Also arguably their technology was pioneering.

Quite a few new ones have sprung up.

But in a world of sovereign defaults and authoritarian rule - and the collapse of Switzerland as a safe haven - that leaves very few jurisdictions that can protect by rule of law whilst having also a military sting if confronted - namely that leaves Singapore - and I’d recommend only physical bullion opposed to on-chain in the world we are living.

Click to expand...

One other thing on paxos

Not sure where I read it but my understanding is it’s related to some questionable banks in the Caribbean known to be related to the guy that did banking for SBF there.

More on the Dubai one also - geopolitically they are protected for which ever power is vying for coercive control in the region.

In a chaotic world that’s gonna be up for grabs and perhaps from that perspective the risk is very high.

Also one thing of note - it appears what ever happens in the future we will have a CBDC of sorts.

Even with a collapse and rebirth that appears set in because any new governments that come out of the ashes even in the worst case scenarios will want absolute control.

Even holding billion physically in the West will be problematic converting into that system IMO.

Then there’s the elephant in the room - deflation

In Japan there’s places you can pick up a home and acres of land for about 10k

That’s what a world of deflation looks like as demographics collapse and assets de-freeze and supply outstrips demand.

Not entirely sure the impact that will have on gold over the next 20 yrs when considering that and the fact that the world will continue to evolve digitally.

Perhaps gold finally ceases to be a store of value and an item of a fixed supply at a lower supply amount becomes the defacto replacement - ergo Bitcoin.

Also people don’t realize just how much gold is in jewelry that will come onto the bullion markets in the future I.e that has been locked up for generations - I see this personally twice.

- friends mother died he had gold glasses through to chains and rings - his wife had no interest in as gold is out of style or demand

- my mother passed and she had draws of jewelry built up and passed down generations (Romani-Jew) yet none of us really wear gold in our generation so apart from token pieces it was all vaulted, but for many they will just scrap for the value.

So I see a mass flush of scrap coming into the markets as my generation disbands with heirlooms in the west

wellington said:

Cache Gold is gone...

Occurred around the time the Chinese were laundering into Singapore, so the AML division in Singapore started pushing through new laws into the all assets and that seeped into metals and Cache didn't make enough money to cover the increased overheads so ceased ops.

Click to expand...

I quoted cache golds statement in fullright in my post. Would have been good if you quoted that in full as well.

wellington said:

I wouldn’t be buying gold in say the EU, UK, US.

Friend recently (6 months back) converted his entire life savings into gold in Europe.

Didn’t seem to understand it’s trapped in the system and he should have moved his funds to Asia where he lives and has lived for 25 yrs - and convert to physical.

If there is a gold seizure in Europe it will be seized and with the debts and collapse of the EU pretty much set - I can’t see how he will have anything but a worthless claim at the relevant time.

Others say the caymans - that’s on Americas doorstep - in a chaotic world those will be seized.

Others say Dubai - perhaps - I think it’s generally against Islam to steal - so that will be tested.


Because either their record search system isn’t in sync, or they are not backed.


One other thing on paxos

Not sure where I read it but my understanding is it’s related to some questionable banks in the Caribbean known to be related to the guy that did banking for SBF there.

More on the Dubai one also - geopolitically they are protected for which ever power is vying for coercive control in the region.

In a chaotic world that’s gonna be up for grabs and perhaps from that perspective the risk is very high.

Also one thing of note - it appears what ever happens in the future we will have a CBDC of sorts.

Even with a collapse and rebirth that appears set in because any new governments that come out of the ashes even in the worst case scenarios will want absolute control.

Even holding billion physically in the West will be problematic converting into that system IMO.

Then there’s the elephant in the room - deflation

In Japan there’s places you can pick up a home and acres of land for about 10k

That’s what a world of deflation looks like as demographics collapse and assets de-freeze and supply outstrips demand.

Click to expand...

well that zeihan dude is a joke at best, wouldnt really count on what he says. He was very wrong about bitcoin in 2022 for example and seems a cia propaganda hack. Uttering such nonsense in one area allows me to assume his research and due dilligence process is overall quite sloppy (since he covers what the letter soup feeds him).

JackAlabama said:

I quoted cache golds statement in fullright in my post. Would have been good if you quoted that in full as well.

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I went on my extensive dealings with their organisation, your comment is above, not sure what benefit that would have being posted twice.

JackAlabama said:

well that zeihan dude is a joke at best, wouldnt really count on what he says. He was very wrong about bitcoin in 2022 for example and seems a cia propaganda hack. Uttering such nonsense in one area allows me to assume his research and due dilligence process is overall quite sloppy (since he covers what the letter soup feeds him).

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When you are in the macro space you take all opinions as a pinch of salt into a bowl and cook up a balanced direction on where you are heading.

His views on Bitcoin aside he has solid geopolitical insight, biased or not, and should not be discounted.

FYI deflation in action:
Japan (Demographic Collapse) Cheap Houses Japan
Italy (Demographic Collapse) My Cheap Italian Home

This will occur across Europe in general, asset prices collapse, areas in Asia (Thailand, China etc), etc

wellington said:

I went on my extensive dealings with their organisation, your comment is above, not sure what benefit that would have being posted twice.

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complete quotation.

wellington said:

When you are in the macro space you take all opinions as a pinch of salt into a bowl and cook up a balanced direction on where you are heading.

His views on Bitcoin aside he has solid geopolitical insight, biased or not, and should not be discounted.

FYI deflation in action:
Japan (Demographic Collapse) Cheap Houses Japan
Italy (Demographic Collapse) My Cheap Italian Home

This will occur across Europe in general, asset prices collapse, areas in Asia (Thailand, China etc), etc

Click to expand...

some places go down some up, nothing new nor groundbreaking.
There are way better analysts out there then loud mouth zeihan, which seems on the level of the green chicken.

JohnLocke said:

But on the flip side, if you're using legit money to buy into gold, you probably won't run into trouble with the government taking away your crypto, right?

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Forced seizure due to outlawing Gold.. is the most pressing issue.

All fugazi. If you want to buy gold go and get physical gold. Don’t give your money to someone who claims to be holding gold for you.