Gold-fraud technology takes a leap in the right direction
Photo by Michael Steinberg from Pexels
Where there is financial gain, there is always a risk of fraud, and the gold-industry is clearly no exception.
In July this year, it came to light that China was at the centre of one of the biggest gold scandals that the world has ever seen in recent history when Wuhan-based, Nasdaq-listed Kingold Jewellery, which is one of China’s largest jewellery manufacturer, was caught out using 83 tonnes of fake-gold as collateral for their loan. Following an inspection of the gold back in February, 83 tonnes of fake gilded copper bars were found to be sitting in their creditors’ coffers, instead of the 83 tonnes of real gold promised as backing for their 16 billion yuan worth of loans. To put that into perspective, 83 tonnes of gold is the equivalent of 22 per cent of China’s annual gold production and 4.2% of China’s 2019 state gold reserve, making this an extremely concerning find for the Chinese authorities and the rest of the world.
If more than 4% of the Chinese inventory gold is fake, then this begs the question as to how many other gold bars sitting in coffers across the world may also be counterfeit? Could more billion-pound loans be sitting without viable backing?
When looking at how 83 tonnes of fake gold could have gone unnoticed for so long, experts agree that the problem lies with the traceability of certified gold from the moment it leaves the mine. This gap in traceability leaves room for fraudsters to penetrate the system, taking advantage of the lack of suitable fraud technology.
A leap for gold-fraud tech
This gold scandal and past scandals, such as the bullion-for-scrap swap tax avoidance scam that took place in Australia in 2016, could have been easily avoided if it were possible to trace certified gold from mine to marketplace.
Although at present, we do not know the true extent of the gold-fraud scandal across the world, the good news for creditors, investors and clients of ABC Refinery who are concerned about the rise in gold-fraud and the current chaos in the gold market, is that gold-fraud technology has recently taken a very significant leap in the right direction, thanks to the collaboration between ABC Refinery of the Pallion Group and Blockhead technologies.
Blockhead and ABC refinery have partnered to create a technology that can track and trace precious metals and detect when they have been tampered with. The technology incorporates cutting edge blockchain-enabled STAMP vision technology that uses advanced image processing and leverages the security of blockchain to track gold through the entire gold supply chain from mine to buyer.
David Woodford, Pallion’s chief commercial officer, said: “ The technology will provide the gold industry the surety that the metal they purchase from ABC Refinery can be validated as being ethically sourced and reliably tracked throughout its journey from the mine site to the marketplace.”
With the cost of gold rising, the dangers of gold fraud are becoming increasingly costly, making this technology solution the perfect answer to gold-buyers prayers.
