Gold fraud is on the rise but new tech is helping stomp it out
Technology companies, particularly the software-as-a-service (SaaS) sector, have performed well on the ASX, with small cap tech stocks up 115 per cent since mid-March despite the crushing impact of the COVID-19 pandemic.
Likewise, the resources sector has also put in a sterling performance with small caps rising 134 per cent during the same time period.
And the resources sector looks to be a lucrative opportunity for the tech hopefuls, which are increasingly looking to help solve the issues plaguing the sector.
Software company Blockhead Technologies has developed a technology platform that seeks to reduce the incidence of fraudulent gold bullion, an increasingly costly issue as the price of gold climbs.
This was highlighted by the recent accusation levelled against Wuhan-based, Nasdaq-listed Kingold Jewellery that it had used 83 tonnes of fake gold bars as collateral for 20 billion Chinese yuan ($4bn) in loans.
Blockhead has entered into a partnership with ABC Refinery, the refining division of Australasian precious metals service group Pallion, to track gold throughout the entire supply chain.
Speaking at a press conference, Blockhead chief executive officer Greg Leach said the first part of the partnership was to provide purchasers with an absolute guarantee that the bullion they are buying originated with ABC.
“For a purchaser to be able to say this is absolutely ABC gold that has been produced in an environmentally friendly manner, that’s a big tick and consumers globally are becoming more aware of the environmental aspects of that,” he said.
ABC recently made some large investments that involved the installation of new equipment to eliminate the use of historical chemicals that were not environmentally friendly.
Leach said the second part of partnership is focused on eliminating tampering.
“There are more instances of tampering happening globally,” he said.
Blockhead’s STAMP Vision mobile app uses advanced image processing of gold bullion and the security of blockchain.
Chief Technology Officer David Kucsai explained that each gold bullion bar that came out of a refinery had individual pock marks and indents when it was cast as each bar settled differently.
This effectively gives every single bullion bar a unique signature on each side.
Blockhead will take pictures of every single side of the bullion bar when it is cast by ABC refinery that will be stored in STAMPVision as an uneditable record of that particular bullion bar.
“A consumer can come along in the future and they can actually use their own mobile phone to take pictures of the bullion bar itself and compare it with what is already existing in STAMPVision,” Kucsai said.
“What we do is actually utilise those in an advanced machine learning model, which is able to figure out the major points of interest for those bullion bars on each side.
“That provides surety that the bullion bar actually does exist and is a valid ABC Refinery bullion bar and that it hasn’t been tampered with.”
Imaging each side of the gold bar ensures that attempting to tamper with the gold bullion can be detected as the result would not match up with the stored fingerprint.
Key to this is the company’s BlockVault system, which is an end-to-end encrypted sandbox for mobile devices that ensures that when someone takes a picture of the bullion bar, there is no way to edit it before it gets out to the system to be verified.
“That provides us with very strong security to make sure that the data we are pushing onto the system will always be consistent and correct,” Kucsai added.
Highlighting the strong interest in this field, Blockhead is not the only player.
Security Matters (ASX:SMX) is also offering a mine-to-marketplace ethical gold supply chain assurance solution and has launched the trueGold Consortium, a co-owned entity with The Perth Mint Australia.
trueGold will seek to raise capital via its global network of strategic and investment partners to finalise development and fully launch its solution.
Its supply chain integrity and asset tracking blockchain technology is focused on creating digital twins to all physical objects by irrevocably marking and tracking a range of fungible products and substances to create an end-to-end transparency solution.
Security Matters has granted trueGold a licence to use all intellectual property it owns or licences relating to the SMX technology for the purposes of the marking of gold as a precious metal.
Full commercial roll-out of trueGold’s technology and blockchain platform is expected to be in the first quarter of 2021.
Separately, The Perth Mint also offers its GoldPass app that is powered by technology provided by Infinigold, which issues digital certificates that give investors guaranteed ownership of specific stores of physical gold.
These certificates are stored within a digital vault on the owner’s mobile device and are accessible only by the owner and always verifiable against the Mint’s ledger, allowing investors to buy and sell gold in real time.
At Stockhead, we tell it like it is. While Security Matters is a Stockhead advertiser, it did not sponsor this article.