e-gold

e-gold is a agenda gold bill operated by Gold & Silver Reserve Inc. beneath e-gold Ltd., and accustomed the burning alteration of gold buying amid users until 2009 if transfers were abeyant due to acknowledged issues. e-gold Ltd. is congenital in Nevis, Saint Kitts and Nevis but the operations were conducted from Florida, USA.

In 2007 the proprietors of the e-gold annual were accusable by the United States Department of Justice on four counts of actionable money bed-making regulations. In July 2008 the aggregation and its three admiral pleaded accusable to accuse of "conspiracy to appoint in money laundering" and the "operation of an actionable money transmitting business" in the U.S. District Court for D.C.1 The aggregation faces fines of $3.7 million.

As of November 2009 the company's website states "As e-gold Users are aware, by acceding with accordant authorities including the U.S. Department of Justice, e-gold has abeyant all e-metal Spend action accountable to affair assertive licensing requirements. As a result, e-gold Users accept been clumsy to appoint in any transactions, including exchanges, that would crave either accepting or authoritative an e-metal Spend from the accounts they control. We are, however, alive agilely to advance a agency by which annual Owners will be able to admission the amount in their account".2

As of December 2010 the aggregation states that acquittance action has been accustomed "We are admiring to advertise that we accept accomplished an acceding with government authorities that will admittance owners of VAP-Qualified Accounts to be paid in U.S. dollars their commensurable allotment of the monetized amount of the e-metals in such Accounts"

History

e-gold was founded in 1996 by Dr. Douglas Jackson and Barry K. Downey.3

The amount of e-gold accounts (as claimed by e-gold) grew from 1 actor in November 2003 to 3 actor on 22 April 2006.4 In 2008, the aggregation appear added than 5 actor accounts.

Crime and fraud

e-gold has been perceived by the United States government as the average of best for abounding online con-artists, with pyramid schemes and high-yield investment programs ("HYIPs") commonplace. This has been abhorrent on e-gold's action of irreversible transactions. In 2006, e-gold began blocking accounts area artifice is accurate or suspected.5

e-gold and OmniPay accept aswell been accused of getting a average for money laundering. As agenda gold bill providers are not banks but may be advised money account businesses, they are accurately appropriate to accomplish assorted sorts of "know your customer" accomplishments checks.

In January 2006, BusinessWeek appear on the use of the e-gold arrangement by ShadowCrew, an 4000-strong all-embracing abomination syndicate complex in massive character annexation and fraud.6 Omar Dhanani of Fountain Valley, California, affiliated to the ShadowCrew, is an e-gold chump and is appear to accept confused amounts alignment from $40,000 to $100,000 a anniversary from gain of abomination through e-gold.7

In response, Jackson appear a letter which declared that "e-gold operates accurately and does not disregard bodies attempting to use e-gold for bent activity. e-gold has a continued history of cooperation with law administration agencies in the US and worldwide, accouterment abstracts and analytic abetment in acknowledgment to allowable requests." He added acclaimed that "Our agents has alternate in hundreds of investigations acknowledging the FBI, FTC, IRS, DEA, SEC, USPS, and others." 8

In August 2006, WORLDLawDirect attorneys appear e-gold admiral and their acknowledged admonition to be the accountable of a U.S. Federal Court subpoena. They accept e-gold is accountable to U.S. Federal Court administration and may be captivated accountable for some or all of the investors' losses (and abeyant amateur damages) in the Solid Investment 9 ample calibration high-yield investment affairs (HYIP) scam.10citation needed On 27 April 2007, a federal admirable board in Washington, D.C. accusable e-gold Ltd and its owners on accuse of money laundering, conspiracy, and operating an actionable money transmitting business.11 e-gold, however, claimed that the accuse were groundless, and responded to the allegations.12 However, in 2008 E-gold pled accusable to some of the accuse (see below).

In July 2008, the brother of footballer Joseph Yobo was kidnapped in Nigeria. The kidnappers accepted a bribe of $10,000 paid through e-gold.13

2007 indictment

In April 2007, the US government ordered e-gold administering to lock about 58 e-gold accounts, including ones endemic by The Banknote Exchange, AnyGoldNow, IceGold, GitGold, The Denver Gold Exchange, GoldPouch Express, 1MDC (a Digital Gold Currency, based on e-gold), and affected OmniPay's owner, G&SR, to cash the bedeviled assets.14 A few weeks later, e-gold itself was accusable on four counts. 15

The aspect of the allegations in the allegation is twofold: (1) e-gold is an actionable money transmitting article as authentic by United States Code;16 and (2) e-gold was a de facto agency of affective money from actionable activities to wit: high-yield investment programs which are Ponzi scams, acclaim agenda and character artifice sites and retailers of adolescent pornography.

The allegation alleges that the defendants knew of actionable activity associated with accounts and recorded it in the e-gold database with notations such as "child porn", "scammer", and "CC fraud".17 Additionally, it alleges that while e-gold placed "value limits" on assertive accounts doubtable of bent activity, they appropriate that the buyer accessible a new account, agreement no restrictions on their adeptness to move funds out of the aboriginal account.18

Despite the acknowledged action, e-gold charcoal in business, admitting no best accepting any new accounts. However, its gold banknote affluence accept alone from 112,188 oz in April 2007 to 84,856 oz (from 3,491.0 kg to 2,461.2 kg) by June 2007.19 As of July 2008 affluence accept counterbalanced at 2,420 kg.

Douglas Jackson, CEO, has issued a accessible rebuttal.12

2008 court trial

E-gold was approved with abuse of 18 USC 1960 in UNITED STATES OF AMERICA v. E-GOLD, LTD, District of Columbia court. The cloister begin adjoin E-gold, cardinal that "a business can acutely appoint in money transmitting after attached its affairs to banknote or bill and would accomplish a abomination if it did so after getting licensed."20 In July 2008 the aggregation and its three admiral pled accusable to cabal to appoint in money bed-making and cabal to accomplish an actionable money-transmitting business.1 The aggregation faces fines of $3.7 million, however, the accusable appeal is allotment of a appeal acceding action in which the DA alone a lot of charges. Regardless, the aggregation has vowed to abide operations afterward the new Federal KYC guidelines. One upside of the cloister case for e-gold users is that the adjudicator has alone any accuse of artifice apropos the e-gold user acceding and has accepted the accuracy of the company's gold assets audit.

In November Gold & Silver Assets CEO Douglas Jackson was bedevilled to 300 hours of association service, a $200 fine, and three years of supervision, including six months of electronically monitored home detention.21 He had faced a best book of 20 years in bastille and a $500,000 fine. Adjudicator Rosemary Collyer said the men adapted allowing sentences because they did not intend to appoint in actionable activity. Jackson's advocate claimed Jackson was absolved the added accomplished because he is acutely in debt - the Adjudicator said "Dr. Jackson has suffered, will abide to suffer, and may never be acknowledged with E-Gold". Reid Jackson, Douglas Jackson's brother, and E-Gold administrator Barry Downey were anniversary bedevilled to three years of probation, 300 hours of association service, and ordered to pay a $2,500 accomplished and a $100 appraisal fee each.

Criticisms

Security

As with any online transaction system, e-gold is accessible to assorted threats, conspicuously phishing (for example, artificial emails allurement for login details) and malware (such as keystroke logging spyware).

e-gold offers no aegis whatsoever if an antagonist succeeds in accepting the user's e-gold annual number, the user's e-gold password, and admission to the user's registered email account. Any losses consistent from a aegis aperture cannot be baffled back transfers are non-reversible. If funds are stolen, e-gold will not block a recipient's annual after getting issued with a cloister order.

In 2005, the Los Angeles Times appear on a distinctively created Trojan horse that compromised "dozens" to "the low hundreds" of e-gold accounts.22 While Trojans usually silently almanac the login data of the biting user, the Trojan in catechism (Win32.Grams) emptied the accounts themselves by appointment the capacity to the attacker's accounts.23

e-gold recommends that users after a affliction should consistently use a mouse-driven basic keyboard alleged "SRK Passphrase Entry" if logging in. Other aegis recommendations from e-gold cover akin admission to a individual IP abode or browser (Account Sentinel) additional application Mozilla Firefox, a firewall and antivirus software 24

Regulatory challenges and shortcomings

e-gold Ltd. was registered in Nevis, Lesser Antilles in 1999, but was briefly removed from the register. e-gold austere an authoritative affair and as of July 14, 2006, it is appropriately registered in Nevis.

In September 2004, several Australian based e-gold bill exchangers accomplished operation as they did not authority an Australian Financial Services licence (AFSL) 25 Australian based agenda bill exchangers that bankrupt down voluntarily, due to the Australian Securities and Investments Commission (ASIC) licencing requirements, included goldex.net, sydneygoldsales.com and ozzigold.com.

On 24 November 2006, e-gold abeyant all accounts captivated by barter amid in Iran.26

eBay policy

Beginning January 2006, eBay has belted buyers and sellers from application abounding online transaction systems and encouraged them to use Paypal, which is wholly endemic by eBay. eBay accurately called e-gold as one of the online transaction systems that will aftereffect in them cancelling a seller's annual if used. eBay cited e-gold's action of non-reversible affairs as a damage to the client experience.27not in commendation given

E-Gold Reopens Access

On December 31, 2010, e-gold accomplished a amount admission plan that was accustomed by accordant authoritative authorities in the U.S. Users would accept admission to the amount in their accounts afterwards appointment added advice to e-gold, and afterwards a analysis of this advice by the Court-appointed Claims Administrator and the U.S. Government.28