This is to accumulate good impressions for the ceremony that ensues. The Karmapa then places the crown on his head while reciting the mantra 'Om Mani Peme Hung', transmitting blessings to each participant in the ceremony to the extent that they are capable of receiving them. It is said that by merely seeing of the Black Crown during the ceremony, one will become the first bhumi bodhisattva within three lifespans. This is one of the key reasons why the Black Crown is so important to Kagyu lineage.
On July 5th, 2004 the Indian Supreme Court delivered a final judgement to grant Rumtek monastery to the Karmapa Charitable Trust, principal supporters of Thaye Dorje, one of the rival candidates for the title of 17th Karmapa. Since then an inventory of valuables is being prepared. As such, the location and integrity of the Black Crown is currently unknown.
Source: Wikipedia > Black Crown
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