Perth Mint cryptocurrency token under a cloud as Singaporean tech company drops support

Perth Mint cryptocurrency token under a cloud as Singaporean tech company drops support

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The company that runs the Perth Mint’s cryptocurrency has announced it will no longer support the digital tokens because of alleged breaches of Australian and US laws by the taxpayer-owned organisation, in a move understood to have surprised the mint.

Trovio, a Singaporean-based technology company has run the Perth Mint Gold Token (PMGT), since 2019.

PMGT is described on the mint’s website as a “secure way to trade in cryptocurrency” because every token can be turned into physical gold held at the mint and guaranteed by the government.

The mint confirmed it had been working with Trovio since early last year to bring its involvement in the token program to an end, a process the ABC was told was started by the mint.

It is understood a statement publicly announcing those efforts on Trovio’s website for the PMGT only came to the mint’s attention on Monday after questions from the ABC, after both sides had only agreed to make their efforts public once the change was finalised.

A historic three story building with arches and columns on its facade and a large flagpole. It has a statue in front of it.
The Perth Mint has been caught up in a controversy over some of its services.(Four Corners: Mat Marsic)

It comes as doubt swirls over the future of another mint service – the GoldPass app – which allows users to buy, sell and trade gold from their smartphones with little more than a licence and a bank account.

Decision sparked by alleged regulation breaches

In a statement released on the token’s website dated March 1, Trovio said it would no longer support the PMGT “due to ongoing investigations into … alleged breaches [by Perth Mint] with AUSTRAC and US State Regulation”.

The statement was updated last night to say Trovio had made a decision to no longer support the PMGT “due to several factors after a number of years in operation”.

But the ABC has been told the mint had initiated that process early last year, after reassessing the risks and benefits of the partnership which see Trovio run the token, with the mint guaranteeing the digital currency and allowing its name and logo to be used.

Around 1,195 Perth Mint Gold Tokens have been issued since they were launched, representing 1,195 ounces of gold – worth about $3.5 million and sold to customers in Australia and the US.

“Working with an entity owned by the government of Western Australia and one of the largest London Bullion Market Association (LBMA) accredited refineries aligned with the product vision, as well as Trovio’s core values at inception,” Trovio said in its statement.

The original version of the webpage included the line: “However, considering recent allegations we have decided to no longer support this product.”

Perth Mint gold
The Perth Mint refines 330 to 340 tonnes, or 11 million ounces, of gold a year.(Supplied: Perth Mint)

It was removed when the page was updated.

The Perth Mint is currently being investigated by Australia’s financial crimes watchdog, AUSTRAC, over its compliance with anti-money laundering and counter-terrorism funding laws.

It said it had also self-reported breaches of what’s known as the US Model Commodity Code, which has been adopted by 23 US states, by holding customers’ gold in its vaults.

The ABC last week revealed that while the mint made that information public last year, it did not mention the breaches could date back to 1998, when some services launched, and span at least 900 accounts holding hundreds of millions of dollars’ worth of precious metals.

Last week the mint said it had self-reported the issue and had been proactively engaging with US regulators, and had taken steps to limit the opening of any new non-compliant accounts.

An investigation by the LBMA is also underway, after a Four Corners investigation revealed the Mint had sold gold bars to China which met international standards for 99.99 per cent pure gold but fell short of the Shanghai Gold Exchange’s more strict requirements.

In a statement earlier this month, a Perth Mint spokesperson said the mint welcomed engagement with the LBMA and was committed to working transparently through the investigation process.

Premier not informed about token end

Premier Mark McGowan was the minister responsible for the mint at the time the PMGT was launched.

But when asked about it today he said he didn’t have any memory of it being brought to his attention at the time, and said he “hadn’t been informed” about its looming end.

“I don’t have any recollection of anything about cryptocurrency,” he said.

Mr McGowan denied that illustrated a lack of communication between the mint and government, and within government.

A tight head and shoulders shot of WA Premier Mark McGowan talking.
Mark McGowan was the minister responsible for the mint at the time the cryptocurrency was launched.(ABC News: James Carmody)

“Look, there’s numerous issues in government,” he said.

“When you’re the premier of the state you have to be across numerous issues of public administration in all sorts of areas of economic, social, federal, environmental infrastructure, personal across government, and that’s the nature of things.

“Now in terms of the issue that you’re referring to, whatever happened in 2019? I don’t have any recollection of it.”

Mr McGowan instead directed questions to the minister currently responsible for the mint, Bill Johnston, who will address the media later today, after returning from a two-week overseas trade mission.

‘Far from a storm in a teacup’

Opposition Leader Shane Love said Trovio’s public statement showed it was not comfortable dealing with the mint.

“It’s further indication that this is far from a storm in a teacup,” he said.

A man in a button up shirt and blazer speaks against a leafy background.
Shane Love says there needs to be a full explanation given into the matters at the mint.(ABC News: Keane Bourke)

In its statement, Trovio said customers would be able to trade their PMGTs on a cryptocurrency exchange or turn them into Perth Mint GoldPass certificates.

It said further information about the wind-down process would be published in the coming months.

Perth Mint continues to promote the token on its website, which links to a Trovio-run site that still contains promotions of the product, but includes the announcement under its ‘news’ section.

“I am surprised that this hasn’t been given more air,” Mr Love said.

“On the back of everything else that’s happened with the Perth Mint, we know there is a lot of interest in what’s going on.

“It is time that there was a full statement made on these matters by either the minister [Bill Johnston or] the premier.

“The public do deserve to have more information than what they’ve been given thus far.”

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