Commodity Joker Brokers, Kryptnex AG, and Billions of Dollars Worth of Imaginary Ultra Fine Copper Powder

1. The Setup

On 1 July 2025, Asif Ali, operating through a Swiss company called Kryptnex AG, submitted a request via Financely’s metals repo intake portal. He claimed ownership of 500 kilograms of Cu 99.99999% ultra fine copper powder, allegedly stored in the Embrach Free-Zone and "worth" over €1.15 billion.

That valuation equals approximately USD 2,300 per gram. Meanwhile, LME spot copper was trading at approximately $9,000 per metric tonne—meaning his number was inflated by more than 250,000%. He requested $450 million in non-recourse financing, with supposed title to the goods and “supporting documentation available.” None was uploaded.

2. Early Doubts

We requested basic verification:

• Who inspected the metal?
• Can you provide the SKR and assay?
• Which warehouse confirmed the custody?

His reply:

"It is stored in Embrach Free-Zone. The SKR has been issued by ISE in Lucerne (Institute of Rare Earth & Metals). The analysis was done less than 6 months ago by the ISE. I have personally seen all the key documents in original."

This set off immediate red flags. “ISE” is not a recognized inspection or verification agency. It does not appear on any lender-approved inspection panel. Reputable firms in metals repo include SGS, Intertek, Bureau Veritas, and Cotecna. ISE has no visibility, no reputation, and is unknown across the commodities and structured credit markets.

For someone claiming to hold over $1 billion worth of ultra high-grade copper powder, not uploading a single inspection certificate or warehouse release note was a clear sign of fiction.

3. Standard Process Followed

Despite these doubts, we treated the file seriously. Financely issued a standard engagement package:

• Engagement letter governed by English law
• A $189,250 retainer, split into two tranches
• A 3% success fee on funded amount

Due to the suspicious collateral, we triggered our Advanced Due Diligence (ADD) protocol. This involved a formal written request for a legal opinion under the GMRA framework, issued by one of five pre-approved Tier 1 law firms.

The client was presented with two options, as documented:

• Engage Allen & Overy, Clifford Chance, Linklaters, Mayer Brown, or Norton Rose directly, and upload the signed legal opinion
• Allow Financely to engage counsel on his behalf upon receipt of the initial $89,250 retainer

This is standard protocol. Any claim involving exotic collateral, unverifiable SKRs, or non-accredited storage locations must clear ADD before being shown to the lender panel. This protects everyone involved.

4. His Meltdown

Rather than proceed, Asif Ali refused the legal opinion request outright. Minutes later, he emailed a list of grievances, claiming:

• “Demands a substantial non-refundable fee of USD 189,250 upfront without any binding obligation”
• “Governing law is England and Wales… yet you present yourself as U.S.-based”
• “Documents hosted on Fiverr Workspace, which raises serious concerns over institutional credibility”

He described the structure as “asymmetrical” and “risk-heavy.” Then he demanded a refund of the consultation fee and blocked further communication. No documents were ever provided. No inspection certificates, no SKR, no warehouse ID, no assay. Nothing.

5. A Textbook SKR Fraud Attempt

This case follows the classic SKR fraud playbook:

• Make sensational claims about rare, ultra-high-value metal holdings
• Refuse to provide basic documentation upfront
• Invent non-existent third-party “verifiers”
• Ask for lender data before submitting KYC
• Collapse or vanish the moment fees or legal review are requested

We see variations of this weekly. The goal is often to harvest term sheets, lender names, or underwriting frameworks to resell to third parties. The actual metals don’t exist. In this case, neither did the verification agency.

6. The Token Red Flag

Public records show that Kryptnex AG also claims to issue a gold-backed cryptocurrency. This raises another issue. If you can’t validate alleged ownership of $1 billion in copper powder under standard repo protocols, how can you claim custody of vaulted gold for token issuance?

It is reckless for any investor, institutional or retail, to trust such claims without legal and physical verification. The refusal to provide a legal opinion is not procedural—it’s a red flag. You don’t walk away from $450 million in financing over a request to validate title and storage, unless there’s nothing to validate.

7. Final Word

Financely followed due process. We issued a compliant mandate, required a legal opinion, and offered a best-efforts advisory framework. What we received in return was deflection, bad-faith accusations, and total non-cooperation.

The file is now closed. Our compliance team reserves the right to escalate if further misrepresentation occurs.

We remain committed to protecting the integrity of metals repo, and structured finance more broadly, from bad actors posing as clients.

© Financely Group. This article is based on factual correspondence. All statements reflect real interactions with the named party and are supported by documentary evidence.