|The factual accuracy of parts of this article (those related to article) may be compromised due to out-of-date information. (November 2010)|
e-gold was a digital gold currency operated by Gold & Silver Reserve Inc. under e-gold Ltd. that allowed the instant transfer of gold ownership between 1996 and 2009, when transfers were suspended due to legal issues. e-gold Ltd. was incorporated in Nevis, Saint Kitts and Nevis with operations conducted out of Florida, USA.
In 2007 the proprietors of the e-gold service were indicted by the United States Department of Justice on four counts of violating money laundering regulations. In July 2008 the company and its three directors pleaded guilty to charges of "conspiracy to engage in money laundering" and the "operation of an unlicensed money transmitting business" in the U.S. District Court for D.C. The company faces fines of $3.7 million.
As of November 2009 the company's website states, "As e-gold Users are aware, by agreement with relevant authorities including the U.S. Department of Justice, e-gold has suspended all e-metal Spend activity subject to meeting certain licensing requirements. As a result, e-gold Users have been unable to engage in any transactions, including exchanges, that would require either receiving or making an e-metal Spend from the accounts they control. We are, however, working diligently to develop a means by which account Owners will be able to access the value in their account".
As of December 2010 the company states that refund policy has been approved "We are pleased to announce that we have finalized an agreement with government authorities that will permit owners of VAP-Qualified Accounts to be paid in U.S. dollars their proportionate share of the monetized value of the e-metals in such Accounts"
e-gold was founded in 1996 by Dr. Douglas Jackson and Barry K. Downey.
The number of e-gold accounts (as claimed by e-gold) grew from 1 million in November 2003 to 3 million on 22 April 2006. In 2008, the company reported more than 5 million accounts.
Crime and fraud 
e-gold has been perceived by the United States government as the medium of choice for many online con-artists, with pyramid schemes and high-yield investment programs ("HYIPs") commonplace. This has been blamed on e-gold's policy of irreversible transactions. In 2006, e-gold began blocking accounts where fraud is proven or suspected.
e-gold and OmniPay have also been accused of being a medium for money laundering. As digital gold currency providers are not banks but may be considered money service businesses, they are legally required to perform various sorts of "know your customer" background checks.
In January 2006, BusinessWeek reported on the use of the e-gold system by ShadowCrew, an 4000-strong international crime syndicate involved in massive identity theft and fraud. Omar Dhanani of Fountain Valley, California, connected to the ShadowCrew, is an e-gold customer and is reported to have moved amounts ranging from $40,000 to $100,000 a week from proceeds of crime through e-gold.
In response, Jackson published a letter which stated that "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." He further noted that "Our staff has participated in hundreds of investigations supporting the FBI, FTC, IRS, DEA, SEC, USPS, and others." 
In August 2006, WORLDLawDirect lawyers announced e-gold officials and their legal counsel to be the subject of a U.S. Federal Court subpoena. They believe e-gold is subject to U.S. Federal Court jurisdiction and may be held liable for some or all of the investors' losses (and potential triple damages) in the Solid Investment  large scale high-yield investment program (HYIP) scam. On 27 April 2007, a federal grand jury in Washington, D.C. indicted e-gold Ltd and its owners on charges of money laundering, conspiracy, and operating an unlicensed money transmitting business. e-gold, however, claimed that the charges were groundless, and responded to the allegations. However, in 2008 E-gold pled guilty to some of the charges (see below).
2007 indictment 
In April 2007, the US government ordered e-gold administration to lock approximately 58 e-gold accounts, including ones owned by The Bullion Exchange, AnyGoldNow, IceGold, GitGold, The Denver Gold Exchange, GoldPouch Express, 1MDC (a Digital Gold Currency, based on e-gold), and forced OmniPay's owner, G&SR, to liquidate the seized assets. A few weeks later, e-gold itself was indicted on four counts. 
The essence of the allegations in the indictment is twofold: (1) e-gold is an unlicensed money transmitting entity as defined by United States Code; and (2) e-gold was a de facto means of moving money from illegal activities to wit: high-yield investment programs which are Ponzi scams, credit card and identity fraud sites and retailers of child pornography.
The indictment alleges that the defendants knew of illegal activity associated with accounts and recorded it in the e-gold database with notations such as "child porn", "scammer", and "CC fraud". Additionally, it alleges that while e-gold placed "value limits" on certain accounts suspected of criminal activity, they suggested that the owner open a new account, placing no restrictions on their ability to move funds out of the original account.
Despite the legal action, e-gold remains in business, though no longer accepting any new accounts. However, its gold bullion reserves have dropped from 112,188 oz in April 2007 to 84,856 oz (from 3,491.0 kg to 2,461.2 kg) by June 2007. As of July 2008[update] reserves have stabilized at 2,420 kg.
Douglas Jackson, CEO, has issued a public rebuttal.
2008 court trial 
E-gold was tried with violation of 18 USC 1960 in UNITED STATES OF AMERICA v. E-GOLD, LTD, District of Columbia court. The court found against E-gold, ruling that "a business can clearly engage in money transmitting without limiting its transactions to cash or currency and would commit a crime if it did so without being licensed." In July 2008 the company and its three directors pled guilty to conspiracy to engage in money laundering and conspiracy to operate an unlicensed money-transmitting business. The company faces fines of $3.7 million, however, the guilty plea is part of a plea bargaining process in which the DA dropped most charges. Regardless, the company has vowed to continue operations following the new Federal KYC guidelines. One upside of the court case for e-gold users is that the judge has rejected any charges of fraud regarding the e-gold user agreement and has confirmed the veracity of the company's gold reserve audit.
In November Gold & Silver Reserve CEO Douglas Jackson was sentenced to 300 hours of community service, a $200 fine, and three years of supervision, including six months of electronically monitored home detention. He had faced a maximum sentence of 20 years in prison and a $500,000 fine. Judge Rosemary Collyer said the men deserved lenient sentences because they did not intend to engage in illegal activity. Jackson's lawyer claimed Jackson was spared the heavier fine because he is deeply in debt - the Judge said "Dr. Jackson has suffered, will continue to suffer, and may never be successful with E-Gold". Reid Jackson, Douglas Jackson's brother, and E-Gold director Barry Downey were each sentenced to three years of probation, 300 hours of community service, and ordered to pay a $2,500 fine and a $100 assessment.
e-gold offers no protection whatsoever if an attacker succeeds in obtaining the user's e-gold account number, the user's e-gold password, and access to the user's registered email account. Any losses resulting from a security breach cannot be undone since transfers are non-reversible. If funds are stolen, e-gold will not block a recipient's account without being issued with a court order.
In 2005, the Los Angeles Times reported on a specially created Trojan horse that compromised "dozens" to "the low hundreds" of e-gold accounts. While Trojans usually silently record the login details of the unsuspecting user, the Trojan in question (Win32.Grams) emptied the accounts themselves by transferring the contents to the attacker's accounts.
e-gold recommends that users without a disability should always use a mouse-driven virtual keyboard called "SRK Passphrase Entry" when logging in. Other security recommendations from e-gold include restricting access to a single IP address or browser (Account Sentinel) plus using Mozilla Firefox, a firewall and antivirus software.
Regulatory challenges and shortcomings 
e-gold Ltd. was registered in Nevis, Lesser Antilles in 1999, but was temporarily removed from the register. e-gold cleared an administrative issue and as of July 14, 2006, it is properly registered in Nevis.
In September 2004, several Australian based e-gold currency exchangers ceased operation as they did not hold an Australian Financial Services licence (AFSL)  Australian based digital currency exchangers that closed down voluntarily, due to the Australian Securities and Investments Commission (ASIC) licencing requirements, included goldex.net, sydneygoldsales.com and ozzigold.com.
eBay policy 
Beginning January 2006, eBay has restricted buyers and sellers from using many online payment systems and encouraged them to use Paypal, which is wholly owned by eBay. eBay specifically named e-gold as one of the online payment systems that will result in them cancelling a seller's account if used. eBay cited e-gold's policy of non-reversible transactions as a detriment to the buyer experience.[not in citation given]
E-Gold reopens access 
On December 31, 2010, e-gold initiated a value access plan that was approved by relevant governmental authorities in the U.S. Users would have access to the value in their accounts after submitting additional information to e-gold, and after a review of this information by the Court-appointed Claims Administrator and the U.S. Government.
See also 
- Grant Gross (2007-07-22). "IDG News Service Internet currency firm pleads guilty to money laundering". Archived from the original on 2009-04-14.
- "e-gold Blog: e-gold Update: Value Access".
- e-gold Corporate
- e-gold Statistics
- "E-Gold Gets Tough on Crime". Wired. 2006-12-11.
- Gold Rush
- The Hindu Business Line : Gold's the bait
- Letter from Dr. Douglas Jackson; Chairman, e-gold, Ltd
- WORLDLawDirect - Solidinvestment.com investment scam
- Online Payment Network Abetted Fraud, Child Pornography
- e-gold Founder Denies
- "Kidnappers Demand e-gold For Safe Return of Nigerian Soccer Player’s Brother". DGC Magazine. 2008-07-16.
- “Digital Currency Business E-Gold Indicted for Money Laundering and Illegal Money Transmitting” — U.S. Department of Justice press release
- full DoJ indictment document
- http://www2.law.cornell.edu/uscode/uscode18/usc_sec_18_00001960----000-.html Title 18 USC Section 1960
- http://www.justice.gov/criminal/ceos/Press%20Releases/DC%20egold%20indictment.pdf e-gold indictment, paragraph 34
- http://www.justice.gov/criminal/ceos/Press%20Releases/DC%20egold%20indictment.pdf e-gold indictment, paragraphs 38-41
- e-gold Examiner
- Linda Friedman Ramirez (2008-05-13). "International crimes: E-currency subject to licensing requirements".
- Stephanie Condon (2008-11-20). "Judge spares E-Gold directors jail time". CNET.
- Data Loss Prevention | Trustwave
- Security Recommendations
- 04-366 ASIC acts to shut down electronic currency trading websites - Australian Securities and Investments Commission
- Herpel, Mark (2006-12-04). "e-gold Closes All Iranian Accounts". Digital Money World. Retrieved 2007-01-08.
- eBay: Redirect
- e-gold: December 31st, 2010 blog
||This article's use of external links may not follow Wikipedia's policies or guidelines. (November 2010)|
- Official website
- Digital Gold Currency Online Magazine
- The Improbable Rise and Fall of E-Gold - Wired article (June 2009)
- Department of Justice Indictment - Press release of the DOJ indictment (April 2007), plus response by Douglas Jackson
- e-gold Gets Tough on Crime - Wired News article (December 2006)
- Gold Rush - BusinessWeek online article (January 2006), plus
- Indomitus report on e-gold - by James Eric Davidson (January 2005)
- Beware of e-gold - THE HINDU Business Line (October 2002)
- In Gold We Trust - Wired magazine article (January 2002)
- Would a Global Crisis Make e-gold Glitter? - BusinessWeek online article (April 2000)