Anti-fraud trade finance blockchain consortium launches in Singapore
According to the Global Trade Review, the World Blockchain Trade Consortium (WBTC) formed last week in Singapore. One of the participants is Global Trade Review’s sister company Singapore based GTR Ventures. Other members are Australia-based National Credit Insurance Brokers, Singapore-based fintech Incomlend and South American fintech Portal Finance. For now, none of the participants are banks.
The consortium will use startup Trade Finance Market’s technology called Invoice Check to prevent invoice fraud. It’s not uncommon for companies seeking finance to attempt to get trade credit multiple times using the same invoice.
The technology is similar to Monetago‘s where there is a blockchain with an obfuscated reference to invoices. Other parties can check the blockchain to verify that an invoice has not yet been financed. In the Monetago case, they partnered with a group of significant trade finance providers in India to prevent trade finance fraud. WBTC aims to share invoices globally.
In the last few years, there have been several examples of major fraud, especially in metal trading. Often the issue was that multiple warehouse receipts were issued for the same pallet of goods. And the fraudulent warehouse receipts were then used to raise finance. This happens even though the financier gets a third party to go and check that the warehouse receipts match the goods. But someone else owns the original receipts and later takes the products. Just last year ANZ was caught out with fraudulent receipts for 30,000 tons of nickel with a value of $286 million at the time.