Leanne Kemp has set herself an ambitious goal: Stamping out diamond fraud and theft.
She’s the founder and CEO of Everledger, a startup launched in 2015 which took part in the Barclays Techstars accelerator ending in June. It has built a global digital ledger — the first of its kind — that collects dozens of cross-reference-able data points on each recorded diamond in an attempt to inject transparency into the market and eliminate associated criminal activity. And that’s just the beginning.
Diamond fraud is a big issue. In April, a London gang was convicted of “running boiler rooms that sold dozens of coloured diamonds to investors at up to 30 times their true value,” the City of London announced at the time. The gang promised exorbitant potential for profit on the stones, and netted more than £1.5 million from dozens of victims. Everledger thinks its tech can tackle this: It makes it possible to check the provenance of diamonds by cross-referencing them against the ledger, preventing buyers from being ripped off.
Likewise, Everledger hopes to drastically reduce diamond theft. The existence of a ledger recording the ownership and origin of the jewels will make them far harder to sell on without recutting to obscure their identifying features or serial code — and lowering their value in the process.
Everledger’s ledger is built on the blockchain — the same decentralised record book that underpins bitcoin. It means there’s no one centralised server running things — instead, data is distributed across the network. Leanne Kemp told Business Insider that Everledger uses the blockchain as its basis because of its immutability. When a bitcoin transaction is written into the blockchain it cannot be altered; similarly, it is impossible to change an entry on Everledger’s ledger once it has been written.
This permanence is vital in tackling fraud, meaning the ledger cannot be amended later to disguise criminal activity.
(Paper certificates for diamonds certifying provenance do already exist, but there’s nothing like Everledger’s ledger, which is continually updateable and accessible from anywhere in the world.)
Since March, 830,000 diamonds have been added to the ledger, Kemp says. It’s a small team — just her and two others — and thanks to the accelerator, the startup is funded through to 2016.
Everledger began with diamonds, but Kemp has far larger ambitions. The startup is looking to move into other luxury goods, she says, and is speaking with select retailers with an eye to including high-end watches in the next 100 days. Again, the benefits are obvious: proof of ownership, tackling fraud, and a deterrent to theft. An API could also be offered to online retailers like Amazon or eBay to help prevent stolen goods being resold through their platform.
Speaking at the Barclays Techstars Demo Day, Kemp made the potential scope of Everledger clear. Following diamonds, jewellery and fine art, and luxury goods, comes electronic devices — and finally, “any asset with a serial number.”
“Diamonds are just the start, and our vision is so much bigger, she told the audience. “We’re going to help in combating counterfeiting, and that’s not a fifty-billion-dollar problem — that’s 1.7 trillion.”