Wilmington treasurer candidate has promoted cryptocurrency to constituents
The status of one Wilmington City Council member caused much debate during the council’s September 3 virtual meeting. 9/8/20
Delaware News Journal
Wilmington city treasurer candidate Vash Turner has sparked concerns among some constituents with online promotions of a cryptocurrency company that some foreign financial regulators have accused of running a pyramid scheme.
Turner, a current city councilman, is running for a position that would put him in charge of taxpayer funds, including overseeing the city’s bank accounts, payments and investments. He also would play a role in the city’s decisions to borrow money on the bond market.
For years, Turner has used his Facebook account to promote investments in a gold-backed digital currency offered by a German company called Karatbars.
Some in his district, particularly in the Cool Spring neighborhood, are raising questions. Thomas Natoli and others said Turner personally sent them messages promoting the gold coin product.
City Councilman Vash Turner promoting the cryptocurrency company Karatbars on Facebook (Photo: Facebook.com screenshot)
“My concern is that you’re my voice in the city, and you’re using your elected position to sell what I thought was a pyramid scheme,” said Natoli, who supported Turner’s election as councilman.
Greg Luna said he found the promotions “cryptic.”
“As an elected official, he brings credibility to any product or service he represents and in that regard there should be full disclosure that this is an investment and with every investment there is a risk,” Luna said.
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Turner was elected city councilman for the 5th District in 2016. He is a political ally of current Treasurer Velda Jones-Potter. In July, they each changed their campaign filings last-minute, making what appeared to be a coordinated play for top city seats.
He is running against DaWayne Sims, an economic development official in Mayor Mike Purzycki’s administration.
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Turner said he recently had oral surgery and could not speak for an interview. He provided a written statement in response to emailed questions.
“I have not used my position as Councilman to promote Karatbars or any particular types of investments,” he wrote. “I have always promoted the idea that the key to self-determination and self-reliance begins with educational and financial stability.”
In these two Facebook posts, City Councilman Vash Turner promotes a Karatbars cryptocurrency product (Photo: Facebook.com screenshots)
Turner’s public Facebook posts contain numerous promotions of Karatbars. He wrote that he received gifts of real gold cards from the company and shared pictures of himself attending Karatbars events and meeting the company’s CEO. The posts begin before his term as councilman and continue up until April.
He told his followers, “Ask me and anyone else you see promoting Karatbars how you can get involved.” Posting a video about the product, he wrote, “What are you waiting for?”
He frequently tagged others in the comments of the posts, inviting them to informational meetings. In one private message Turner sent to a constituent, he is shown on a promotional flyer for gold digital products as a Wilmington city councilman.
Screenshots of messages Turner sent on Facebook to one of his constituents promoting gold-backed cryptocurrency and the Karatbars product KaratBank Coin (Photo: Provided)
In a Facebook video last September, he said he was introduced to Karatbars in 2014 and made enough money on it within a few months to host a concert.
“It also helped me to be a councilman, a city councilman,” he said in the video. “I never thought I would do that.”
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Karatbars sells customers, or affiliates, “cryptonized gold” tokens and offers them commissions to sign up other customers, according to Business Insider.
In 2014, Canadian authorities issued the company a cease-and-desist order, calling Karatbars’ activity “similar to a pyramid scheme.” The company and three affiliates were later fined in Canada for selling investments without permission.
City Councilman Vash Turner, in a Facebook post in 2019, promotes the cryptocurrency company Karatbars (Photo: Facebook.com screenshot)
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Cryptocurrency news outlet Coindesk.com reported last October that Karatbars is being investigated by the Florida Office of Financial Regulation. Last year, Karatbars also prompted a warning from South African financial authorities, a cease-and-desist order from the German financial watchdog and an open declaration from Namibian officials that it was running a pyramid scheme, according to news outlets.
“The real attraction of new participants … is not the purchase of the gold card, but the desire to earn money through the introduction of new members to the business practice,” officials said, according to a newspaper in Namibia.
Karatbars issued a news release last fall alluding to “a false rumor” about the company and itself called for more regulation of the cryptocurrency industry.
Wilmington 5th District City Councilman Vash Turner speaks at a Cool Spring/Tilton Park Neighborhood Association meeting. (Photo: Jerry Habraken, The News Journal)
Turner said his “personal understanding” was that the company offered gold as a savings tool, and that he purchased physical gold from Karatbars.
He emphasized that his personal finances are in order and “secured through well researched investments in the United States economy.”
In two Facebook posts, city councilman Vash Turner promotes gold-backed cryptocurrency (Photo: Facebook.com screenshots)
Sims, his opponent, said he did not know about Turner’s promotions but said he’s been running on his financial experience over Turner.
“I’m hopeful that my opponent has done some basic level of research about these things he’s promoted to the public and if he has and he’s comfortable with these things that’s another question,” Sims said.
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Luna said he wrote to Turner asking his qualifications to be treasurer but did not hear back. Turner did not respond to a News Journal question about his qualifications to handle city funds.
“When he runs for city treasurer, he’s going to be dealing with treasury, it has a direct impact on the financial health of the city,” Luna said. “Is he in favor of crypto or buying gold? Or is he not going to be in favor of municipal bonds?”
Contact Jeanne Kuang at firstname.lastname@example.org.
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