"Ultra Fine Nano Copper Powder" SKR Fraud Attempt

1. The Billion-Dollar Claim

On 1 July 2025, we received a financing request for a metals repo transaction. The applicant claimed ownership of 500 kilograms of “ultrafine copper powder” with 99.99999% purity, allegedly stored in the Embrach Free-Zone and valued at €1.15 billion—equivalent to over USD 2,300 per gram. At the time, LME cash copper was priced at approximately USD 9,000 per metric tonne, meaning the valuation was inflated by over 250,000%.

2. No Proof, No Paper

Despite requesting $450 million in non-recourse financing, the applicant failed to provide any documentation to support the collateral: no SKR, no inspection certificate, no insurance slip, no warehouse receipt. When questioned, the explanation was:

“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 raised immediate red flags. “ISE” is not a recognised third-party verifier in metals repo finance. Firms with accepted credibility include SGS, Intertek, Cotecna, and Bureau Veritas. “ISE” is not listed in any legitimate registry and holds zero recognition in international trade finance. The refusal to upload the “original documents” only heightened suspicion.

3. Due Process: Our Response

In accordance with Financely’s protocol for high-value ABL deals, we issued:

• A formal engagement letter under English law.
• A milestone-based retainer of USD 189,250, split into two stages.
• A 3% success fee contingent on drawdown.
• An Advanced Due Diligence (ADD) request requiring an external legal opinion from firms such as Clifford Chance or Allen & Overy.

This is standard for all repo submissions involving opaque or unverifiable collateral. The ADD letter was explicit: independently confirm the asset, title, and warehousing arrangements under a GMRA framework. The applicant could either appoint counsel or allow us to do so.

4. The Meltdown

Less than 45 minutes after receiving the ADD requirement, we received the following reply:

“Demands a substantial non-refundable fee of USD 189,250 upfront without any binding obligation… governed by the laws of England and Wales… provides no lender transparency, no performance benchmarks, and no enforceable commitments… hosts deal documents on Fiverr Workspace, which is highly unorthodox...”

The applicant then demanded a refund and threatened to escalate the matter. The tone shifted from cooperative to accusatory as soon as legal scrutiny was introduced. Importantly, the key issue—lack of any verifiable documentation—was never addressed.

5. A Textbook SKR Fraud Pattern

This followed the well-known pattern for SKR-based commodity fraud:

• Exaggerate asset value with unrealistic price claims.
• Use unverifiable “institutes” as validators.
• Refuse to upload documentation or pass KYC.
• Push for lender data or guarantees early in the process.
• Disengage immediately when legal due diligence is triggered.

6. The Bigger Concern: Token Ambitions

Publicly available information suggests the party may also be involved in launching a gold-backed token. If physical copper claims can't pass standard verification, any digital asset backed by vaulted metals should be met with extreme skepticism.

This content is based on verified communications with the submitting party between 30 June and 4 July 2025. Published in accordance with our AML/CTF obligations and commitment to market transparency. All correspondence is archived and may be shared with relevant authorities upon request.