The likelihood of either a GoldMoney scam or GoldMoney fraud is extremely unlikely. GoldMoney was established in 2001. In my research I have found no substantive problems or complaints.
As I understand, there has been neither a successful GoldMoney scam or fraud carried out by the company or a nefarious individual. As a result, neither the company nor customers have lost any funds to a GoldMoney.com fraud or a GoldMoney scam.
In my research I have found several likely reasons including the way funds are received from and dispersed to customers, strong corporate governance, intense government regulation and rigid compliance to applicable law.
WHAT IS GOLDMONEY?
Outspoken critic of 'paper gold' Adrian Douglas of GATA warned, "What should investors do? Investors need to do their due diligence. They need to determine if they are actually holding a 100-percent precious-metal-backed investment. There are some unallocated investment vehicles that are entirely honest where all the gold and silver sold is actually purchased and held on behalf of the customers. One such example is GoldMoney.com, which conducts and publicizes third-party audits to verify 100-percent backing."
There appears to be no GoldMoney scam being perpetrated by either the company or any GoldMoney account holders. A review of the GoldMoney.com cash processes reveals that the company deals only with bank wires from verified customers who are rigiousrly screened under applicable Know Your Client and Anti-Money Laundering regulations to prevent a GoldMoney scam. Consequently, for anyone engaged in criminal behavior it would be very difficult to carry out a GoldMoney.com scam anonymously or even a strong cloak of their identity.
A GoldMoney review is conducted under a Statement on Auditing Standard 70 Type II audit performed by a Big Four accounting firm. GoldMoney.com is regulated by the Jersey Financial Services Commission under the Financial Services Law (Jersey) 1998.
In my interview with their management I have found that because of these regulations, which carry criminal penalties, GoldMoney has no tolerance for pyramid or Ponzi scams which are illegal in most countries because they are built on a solid foundation of rules and ethics that are strictly adhered to in order to avoid criminal liability and those rules of corporate governance are enforced by regular audits and government regulators.
Neither the company nor GoldMoney account holders appear to be engaged in any type of GoldMoney fraud. Being able to perpetuate a fraud would be extremely difficult because of the reasons cited earlier and the strong corporate governance which has properly segregated duties, the regular auditing by a Big Four accounting firm, the ability of customers to demand physical delivery of bullion at any time, regular online reporting of bullion holdings, immediate access to accounts via the Internet and an otherwise completely transparent system.
As of October 2010 GoldMoney begun using ultrasound scanning technology to verify that each of the gold bars we store for you is free of foreign materials and defects. Any bar that fails the ultrasound test is melted down, assayed and then recast into a new bar. We aim to complete the scanning of all gold bars in the first quarter of 2011.
The quality test is performed using an ultrasound scanning device, developed by General Electric Inspection Technologies (GE). The test is carried out directly within our vaults. It is the same technology used to assure personal safety in the medical and aviation industries.
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SAS 70 stands for "Statement on Auditing Standard 70", and has been developed and is maintained by the American Institute of Certified Public Accountants. A report is generated by an outside auditor that assesses the internal controls operating within a company and verifies the controls are in place.
Examples of controls could be "dual signatures are required for all payments above $10,000 in value" or "error log files are reviewed by IT staff at least once a week". Therefore, a SAS 70 report lists the controls in operation within an organization, as verified by the auditor.
The Type II report is more substantial because it does not only assess the controls in operation but also includes the auditor's opinion of the effectiveness of the controls. Thus the Type I report simply lists the controls whereas the Type II report also tests the controls to confirm they are working effectively.
The audit report is available free of charge to GoldMoney account holders but they are not privileged to share it which is a reason I have not provided a link to a copy of the report. I have come across this before with other companies and the reason this report is not publicly available is probably to reduce the scope of the Big Four's malpractice liability with regards to who can reasonably rely on the audit report.
I have been unable to find any evidence of either a GoldMoney.com scam or GoldMoney.com fruad. Because of the meticulous regulation, precise corporate governance, inflexible compliance with applicable law, regular audits, transparent system and ultimate check of customers being able to demand physical bullion at any time therefore I do not think it is very likely for a GoldMoney.com scam or GoldMoney fraud to be committed.
If someone were to attempt to perpetuate a GoldMoney scam or fraud then it would likely be discovered very quickly and prevented. I have been a customer for several years and have had no problem. Additionally, I have heard of no GoldMoney problem or complaint from any of my thousands of readers. I would be very quick to spread the word if there were a complaint or problem with GoldMoney.
Therefore, in my opinion GoldMoney is a safe institution for an investor's capital. If you have used this service then please leave your comment.