Web Life Forum - e-gold`s Offices Raided By FBI

12-31-05, 02:18 PM

DontBefooled DontBefooled is offline

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e-gold`s Offices Raided By FBI

12-31-05, 04:53 PM

forwardone forwardone is offline

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Wow, that IS big news. Perhaps just a case of sabre rattling?

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12-31-05, 06:39 PM

LeonardSix

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Well holee sheoot! Very interesting. I wonder what this means for all the programs that only take e-gold, particularly after the hacking issue. E-Gold is certainly taking some hits in reputation. Definitly gonna be some shockwaves coming from this.

12-31-05, 06:56 PM

golddust

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I can not say that I am surprised by this information. It was only a matter of time before 'big snoopy' found it's way in. But this article does have truth to reporting an avenue for money laundering as indicated by the Shadow Crew.
I hope that they won't freeze up accounts. That would be the death of 98% of HYIPs and online investing.

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12-31-05, 08:48 PM

tulasu

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I just found about this, too. Think I'll move my bits of Egold for now. Wonder what the shakedown will be - every year Egold goes through a lot of this stuff and always seems to survive, but it's the first time I've heard of their offices being raided.

I've also learned to take 'reporting' with a large grain of salt as they aren't always too fussy about accuracy in their hurry to be the first to get the news out.

Tulasu

12-31-05, 10:41 PM

LeonardSix

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Golddust and Tulasu you both make good points. This news does make me glad I decided to go with Stormpay regardless of their ridiculous fee's. I just feel more comfortable with them since money can be transfered through credit card and you can even link your bank account to your stormpay account ala Paypal. I've heard of stormpay having problems but nothing like e-gold has being experiencing. Hopefully they do pull through though, but Golddust is right it would be a huge blow to the industry if they didn't and who knows what would happen after that.

12-31-05, 10:41 PM

golddust

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I would have to give this article a little more credibility, considering the source.

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12-31-05, 10:56 PM

Hardlyworkin Hardlyworkin is offline

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Wonderful big brother at work again.

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01-01-06, 08:19 AM

forwardone forwardone is offline

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I`ll continue to do what I always do - keep a minimal amount in e-gold which is more for security reasons than anything else, but, it can`t hurt.

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#10

01-01-06, 09:33 AM

sha2682

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Quote:

Originally Posted by forwardone

I`ll continue to do what I always do - keep a minimal amount in e-gold which is more for security reasons than anything else, but, it can`t hurt.

hhmm... i guess that's what i'll do too

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#11

01-01-06, 11:27 AM

clifton

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Quote:

Originally Posted by forwardone

I`ll continue to do what I always do - keep a minimal amount in e-gold which is more for security reasons than anything else, but, it can`t hurt.

It is a good idea anyway. The best protection against hacking

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#12

01-01-06, 04:51 PM

LeonardSix

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Sounds smart, especially with what's going on. When or if things blow over then they can be revaluated.

#13

01-01-06, 07:53 PM

candy

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In view of the outraged reaction to the recent revelations about the government's unwarranted spying activites I suspect that "Big Snoopy" may tread more softly in the near future. So I expect little fallout from the recent actions against the e-currencies as "Snoopy" has to keep looking over his shoulder to see who is watching him. Any major disruption of internet transactions would make internet shoppers angry with "Snoopy" in an election year.

#14

01-07-06, 07:08 AM

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A response has been made by e-gold to the accusations made against it.

http://www.e-gold.com/letter.html

Quote:

Letter from Dr. Douglas Jackson; Chairman, e-gold, Ltd.

e-gold® has recently been the subject of a slanderous and unfounded article in Business Week. e-gold strongly refutes the allegations and presumptions of this article. The article chose to focus through anecdote and suspicion only on an exception - criminal abuse - and ignores the overwhelming majority of e-gold usage. It also fails to note that all online payment mechanisms including credit cards and intermediaries such as PayPal are targeted by criminals, likely at a much greater magnitude than e-gold, and fails to relate the very proactive steps e-gold takes to eliminate any criminal behavior involving e-gold.

e-gold and its Operator, Gold & Silver Reserve (G&SR®), including G&SR's exchange service OmniPay® in cooperation with the United States Government and pursuant to a lawfully issued written request, did allow an examination of the e-gold and OmniPay computer systems and data. The examination occurred on December 16th after normal business hours so as to avoid disrupting access to the system. The examination utilized the full resources of e-gold's system and prevented customer access. We were told by the government examiners that the outage would be for a few hours, however, due to the volume of data maintained by e-gold for its customers' protection, a surprise to the examiners, the examination occupied e-gold's computing capacity for 36 hours. e-gold apologizes for any inconvenience of the system down time caused by the government's request. No charges have been filed against e-gold, G&SR, OmniPay or any of its principals.

e-gold operates legally and does not condone persons attempting to use e-gold for criminal activity. e-gold has a long history of cooperation with law enforcement agencies in the US and worldwide, providing data and investigative assistance in response to lawful requests.

I'm proud of what we have accomplished so far with e-gold. e-gold, now in its 10th year online, is growing exponentially because of a network effect, a global cascade of Users telling their friends who then tell their friends. For the first time since our launch in 1996, this growth is providing the revenue and resources needed for e-gold to accelerate technical development and other refinements to make it more reliable and even less hospitable to those who would seek to abuse it.

We are processing the same volume of transactions and growing at the same exponential pace that PayPal was in the second quarter of 2000. One difference, though, is that they had to give away $tens of millions of their investors' money to build a critical mass of user balances and were continuing a burn rate of about $10 million per month during this period. Altogether they burned through about $275 million of capital losses before their IPO.

e-gold, in contrast, lacking significant outside investment:

has attained a circulation larger than Canada 's official gold reserves (currently 3.46 metric tonnes of gold, equivalent to about $55 million at current exchange rates).
has web traffic surpassing etrade.com and citi.com and is neck and neck with kitco.com as the most heavily trafficked gold related site on the Web
settles 50 to 60 thousand user-to-user payments per day, a daily value of about $10 million
has active Users in every country, (including more than 150,000 in China ) despite our lack so far of foreign language versions - a high priority on our to-do list

e-gold is the only payment mechanism that is truly global, enabling any merchant to accept payment online even if the payer lives in a third world country, has no credit card, or is perhaps 'unbanked' altogether.

e-gold enables the migrant worker of modest means to send value back to his family in Mexico or Bangladesh at a fraction of the cost of conventional international remittance mechanisms. e-gold alone is free of chargeback risk, yet the fee for receiving payment in e-gold is a tiny fraction of those charged by any other systems.

Thanks to e-gold, for the first time in history, normal people of modest means worldwide have the option of using currency that is designed from the ground up to be immune to debasement, with a governance model that precludes even its management and founders from having the power to subvert it.

Gold & Silver Reserve has been operating for over nine years. Seeking to comply with every applicable law, G&SR has reached out to the Government dozens of times, has repeatedly met with officials from the Internal Revenue Service, the FBI, SEC and a variety of other Federal agencies, and has been told – in no uncertain terms – that we were operating legally and in full compliance with all laws, rules and regulations. Additionally, the Government has requested from us – on more than three hundred occasions – information regarding individuals it believed to be lawbreakers. Gold & Silver Reserve complied with every single request in a professional and timely fashion. Numerous Government officials have gone so far as to commend us in writing for our efforts in complying with their requests and aiding them in their investigations.

Very recently, however, the Government concluded that it was unable to “regulate” our business under any current statutes or regulations. Rather than moving Congress to enact legislation, the Government apparently chose to undertake to regulate us under pre-existing statutes which are totally and utterly inapplicable to our business. To do so, the case the Government brought against Gold & Silver Reserve centered around false statements and fabrications made to a Magistrate Judge in Washington , D.C. A week later, when challenged by that Judge, the Government, fearing it would lose its case filed a second suit against Gold & Silver Reserve. We are now addressing that action and are confident that we will be victorious in a very short time.

Both OmniPay and e-gold have been substantially harmed. Both sites were off-line altogether for 36 hours - an interval during which we were at a loss to know what to announce or even how to announce it. There were other direct interventions as well that I am not yet at liberty to discuss that nearly crippled OmniPay's ability to honor its obligations to and on behalf of users. The worst effect of course is on our reputation. This irresponsible smear piece will surely impair our efforts to build strategic relationships with the host of businesses and individuals that would benefit from an embrace of e-gold.

Let me be very clear. e-gold in no manner condones persons or organizations attempting to use e-gold to support criminal acts. The exact opposite is true. e-gold limits accounts that are suspect of illicit activity and has a long history of cooperation with law enforcement agencies.

There are two elements that make e-gold about the dumbest choice a criminal could make if seeking to obfuscate a money trail or otherwise hide the proceeds of crime.

it is impossible for a general user of e-gold to send/add money (value in any form) into the system... he can only get e-gold by receiving an e-gold Spend from someone who already has some.
there's a permanent record of all transfers, that is, a permanent record of the entire lineage of every particle of value in the e-gold system.

There is nothing "anonymous and untraceable" about e-gold. e-gold Spends settle by book entry - it isn't so-called "digital cash".

e-gold is not about crime. e-gold is not a hospitable environment for criminals. e-gold maintains an efficient and highly capable investigative staff to aid in the identification, apprehension and prosecution of any criminal abusing the system. Our staff has participated in hundreds of investigations supporting the FBI, FTC, IRS, DEA, SEC, USPS, and others. This is the reality of every payment system, the need to aid in rooting out criminal abuse, whether it is child pornographers taking advantage of the multiple layers and indirection of credit card middlemen, or smurfs aggregating cash via international remittance processors or even state lotteries.

e-gold has taken a proactive approach, reaching out to law enforcement agencies and NGO's (Non-Governmental Organization) to foster closer cooperation in combating crime online. For example, e-gold is a charter member of the Financial Coalition to eradicate Child Pornography, organized by the National Center for Missing and Exploited Children, along with Visa, MasterCard, Microsoft, AOL, PayPal, First Data and some of the major banks.

I hope to have additional and useful facts shortly and will communicate them when appropriate. I can assure you e-gold is up and running, supporting its customers, and continuing to grow.

Dr. Douglas Jackson

posted 6 January 2006

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#15

01-07-06, 08:17 AM

golddust

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Quote:

the Government concluded that it was unable to “regulate” our business under any current statutes or regulations. Rather than moving Congress to enact legislation, the Government apparently chose to undertake to regulate us under pre-existing statutes which are totally and utterly inapplicable to our business. To do so, the case the Government brought against Gold & Silver Reserve centered around false statements and fabrications made to a Magistrate Judge in Washington , D.C. A week later, when challenged by that Judge, the Government, fearing it would lose its case filed a second suit against Gold & Silver Reserve.

This is the issue; control/regulate enterprise- find a way, squeeze a way, or lastly, negotiate regulatory oversight, or very lastly, leave it to Congress to enact new legislation.
Big Snoopy can not leave it alone now. Attorneys are sharpening their pencils.
Egold may want to consider a permanent vacation to Nevis or another location of choice. That would seem to be the logical decision given the 'costs' of doing business... (read l-i-t-g-a-t-i-o-n.)

golddust

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#16

01-14-06, 01:14 PM

autumn

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e-gold transactions..

I personally have no issues with e-gold; however, I don't find using e-gold for transactions is as efficient as other payment processors. The lack of capability in transferring funds to a bank account (I believe is still true) is a deficiency in my opinion. I believe you can go through other 3rd parties to do so, but that involves more fees and time. Any time you bring in 3rd parties to transactions makes me wonder why and arouses some suspicion on my part. Of course, all hyips seem to use e-gold, which would really be a serious problem, should e-gold fail. It is all high risk, which we should keep in mind, but the profits make it worthwhile for a while.

#17

01-14-06, 05:40 PM

golddust

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Autumn: welcome to WL!

Quote:

The lack of capability in transferring funds to a bank account (I believe is still true) is a deficiency in my opinion.

I agree with this deficiency. I believe that egold arranged it this way to make profits from exchanges through Omnipay, and to prevent the need for them to have "too much information".

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#18

01-21-06, 01:49 PM

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Latest update:-

https://www.e-gold.com/letter2.html

Quote:

e-gold® welcomes US Government review of its status as a privately issued currency
January 20, 2006

Starting in mid-December 2005, Gold & Silver Reserve, Inc. (G&SR), contractual Operator and primary dealer for e-gold, has been the subject of a warranted search of its premises and records, had its domestic bank accounts frozen, and been the target of a precisely timed, extraordinarily misleading attack by a major business publication.

In an emergency hearing in US District Court January 13, 2006, the freeze order on G&SR's bank accounts was lifted. Though numerous criminal claims had been made in obtaining the search and seizure warrants, the Government has not sustained these allegations and the only remaining claim is a contention that G&SR has operated as a currency exchange without the proper license. G&SR had previously proposed to the Government that e-gold be classified for regulatory purposes as a currency, enabling G&SR to register as a currency exchange. In a Treasury report released January 11, 2006, however, the Department of Treasury reaffirmed their interpretation of the USC and CFR definitions of currency as excluding e-gold.

G&SR, for nearly a year, has been engaged with an agency of Treasury in a BSA (Bank Secrecy Act) compliance examination it had voluntarily initiated. G&SR, though preferring that the venue was not a courtroom, welcomes the opportunity to extend its discussions with the Government on how best to achieve appropriate statutory or regulatory cognizance of e-gold while continuing to build e-gold's market share as a medium of international commerce.

Despite the unfounded charges and adverse misleading publicity that have severely damaged both e-gold and G&SR, G&SR has continued to meet all financial obligations and remain completely operational. e-gold remains highly committed to its goal of bringing, for the first time in history, to people of any financial means across the globe, a secure payment mechanism at a fraction of the cost of any other system. e-gold fully expects to transcend the unfortunate events of the past month and resume its exponential growth.

Further information can be found at:

www.e-gold.com
www.omnipay.com
http://www.treas.gov/press/releases/...12005_MLTA.pdf

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#19

01-21-06, 08:03 PM

thetrader

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Great post thanks for the e-gold situation update. I think e-gold is here to stay!

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#20

01-21-06, 09:58 PM

golddust

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E-gold's only problem now is the regulatory scheme the gov't defines for it. Since clearly they don't see a match, it will take time for the legislation to arrive at some category based on their understanding of egold/ecurrency. (And that is yet another dilemma).
Until that happens, should be business as usual for egold.
However, I think if I were egold, I'd be making alternative arrangements, now that they have 'clearance'.

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