Paxos Gold (PAXG) supply doesn’t match their Chainlink data feed or their latest attestation report

PAXG claims to be a gold-backed crypto token with each token representing one ounce of gold. That means tokens should only be minted if there is underlying gold backing them.

PAXG has a Chainlink data feed that reports PAXG’s gold reserves and the feed indicates that it is updated daily.

PAXG also has monthly “attestation” reports that they often release only >= 1 month after the report date. These reports are useless because the data is already outdated by the time they are released to the public. Even if the reports were released on the date of the report they provide little useful information. They only report the gross gold reserves in troy ounces as of that particular date and provide no information about the reserves before or after the report date. The attestation reports also like critical details such as bar location, weight, purity and refiner. The attestation reports even if taken at face value do not provide sufficient information to determine if PAXG was fully backed even as of a historical date.

The Chainlink report currently shows:

60,161.14 troy ounces of gold reserves updated within the last 24 hours.

While PAXG has minted and shows on nearly every other data provider, a supply of 85,681.469 PAXG tokens!

This is a discrepancy of over 25,500 ounces of gold (over $43,000,000 at the current market price)!

PAXG also has a “gold allocation lookup tool” which provides detailed information about the gold bar(s) backing the tokens held by each and every Ethereum address that holds PAXG tokens.

Using their own tool to check the largest holder of PAXG tokens 0xe25a329d385f77df5d4ed56265babe2b99a5436e (17,424.73 tokens, 20.34% of the total supply worth >$30,000,000) shows zero gold allocated and it has been this way for a long time.

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What gives PAXG? Are these tokens really backed by gold or not? Where can the detailed information about each and every bar backing PAXG be found? Why is your Chainlink feed so different from your token supply?

Furthermore, buried within the fine print in PAXG’s terms and conditions is the right to issue additional unbacked tokens to account for “storage fees”.

14.3. Storage Fees

The Company may charge storage fees to all token holders starting no sooner than August 1, 2020 by issuing to the Company new PAXG tokens, thereby diluting the value of existing PAXG tokens. The storage fee will be in line with industry practice, and such storage fee will be passed on to all PAXG token holders on a pro rata basis. The full methodology and exact timing of the storage fee will be disseminated at least thirty (30) days prior to the implementation of such storage fees.

The storage fees are an obligation of all PAXG token holders, regardless of whether such token holder is a Member. By purchasing PAXG tokens, you agree to assign the obligation to pay any and all storage fees tied to the PAXG tokens to subsequent holders of such PAXG tokens, and by receiving transfers of PAXG tokens, token holders agree to accept the assignment of such obligation.

At any point since August 1, 2020 has PAXG issued unbacked tokens to account for storage fees? If so, how many? Where is the transparency and reporting around this if it has been implemented? In either case, surely this cannot account for a 20-30% discrepancy in the supply as noted above.

Note: Since PAXG has a marketcap of over $100,000,000 and is trading on Binance, Kraken, FTX and Gemini, this is a significant issue.