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E-gold Owners Plead Guilty To Money Laundering 469

Posted by timothy
from the laundering-is-just-a-bad-word-for-privacy dept.
Ian Lamont writes "The three owners of Internet currency service e-gold have pled guilty to money laundering in the U.S. District Court for D.C.. The service is based in the West Indies, but the directors apparently live in Florida. They haven't been sentenced yet, but potentially face decades in prison and millions in fines. In addition, the principal director posted a blog entry yesterday saying that 'criminal activity will not be tolerated,' and pledging to eliminate the loopholes that allowed money laundering to thrive on the service. He also claims that e-gold has more transaction volume in a single quarter than all of the first-generation Web currency services like Cybercash, Beenz, and Flooz completed over their lifetimes. Ironically, one of the reasons that contributed to Flooz's demise in 2001 was rampant money laundering."
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E-gold Owners Plead Guilty To Money Laundering

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  • by RandoX (828285) on Tuesday July 22, 2008 @09:51AM (#24289325)

    Here I am, looking up "Money Laundering" in the dictionary trying to figure it out.

    • I tip my hat to you; I haven't laughed that hard at a movie reference in a long time.
    • mon.ey laun.der [muhn-ee lawn-der] - verb (used with object):

      To conceal the source of money as by channeling it through an intermediary...

  • by xpuppykickerx (1290760) on Tuesday July 22, 2008 @09:54AM (#24289373)
    We get caught laundering money, we're not going to white-collar resort prison. No, no, no. We're going to federal POUND ME IN THE ASS prison.
    • by arcite (661011)
      But they have conjugal visits right?...
      • Re: (Score:3, Funny)

        Conjugal visits? Mmmm. Not that I know of. Y'know, minimum-security prison is no picnic. I have a client in there right now. He says the trick is: kick someone's ass the first day, or become someone's bitch. Then everything will be all right.
  • by Anonymous Coward on Tuesday July 22, 2008 @09:56AM (#24289391)

    This royally sucks because e-gold was actually a very simple and easy way to purchase gold with very few and simple fees, and none of the tax burden.

    • by ScrewMaster (602015) on Tuesday July 22, 2008 @10:00AM (#24289457)
      This royally sucks because e-gold was actually a very simple and easy way to purchase gold with very few and simple fees, and none of the tax burden.

      Maybe that's another reason the Feds are going after them.
    • Re: (Score:3, Insightful)

      by murr (214674)

      I never quite understood the appeal of e-gold.

      "When civilization breaks down, I'll have a handy supply of GOLD... in an offshore vault, guaranteed by electronic certificates".

      Does not compute, to me.

      • Re: (Score:3, Insightful)

        by mmontour (2208)

        I never quite understood the appeal of e-gold.
        "When civilization breaks down, I'll have a handy supply of GOLD... in an offshore vault, guaranteed by electronic certificates".

        Who ever said that e-gold was intended to survive the breakdown of civilization? It was intended to be used *within* a civilization to purchase goods, pay for services, etc. It's not a place to keep your life's savings, particularly as they charge a percentage of your balance as a storage fee (like "negative interest").

  • by Jadware (1081293) on Tuesday July 22, 2008 @09:56AM (#24289393)
    The police found out when their gold maxed to 2147483647. Everyone knows glitchers get caught.
  • by whoever57 (658626) on Tuesday July 22, 2008 @09:58AM (#24289431) Journal
    From TFA:

    In harmony with this transformation, we acknowledge that e-gold is indeed a Financial Institution or Agency as defined in US law and should be regulated as a Financial Institution. E-gold Ltd.

    Nw if the federal authorities could get the same concession from PayPal......

    • by stry_cat (558859) on Tuesday July 22, 2008 @10:04AM (#24289501) Journal
      Don't worry they will. e-gold was just smaller and didn't have good enough lawyers. Now that they've got a precedent set, the government will turn its attention towards paypal. The government can't stand to have any "unregulated" exchange of goods, services, or capital.
      • by RandoX (828285)

        Paypal could use some regulation.

      • by nweaver (113078) on Tuesday July 22, 2008 @10:33AM (#24289879) Homepage

        PayPal IS registered: See Paypal Liscencing page [paypal.com].

        • Re: (Score:3, Insightful)

          by mybecq (131456)

          Quite a few states missing from that list.

          Generally they are listed as being registered for "Money Transmission" or "Sales of Checks".

          Not the same thing as a depository institution.

      • Re: (Score:3, Interesting)

        Don't worry they will. e-gold was just smaller and didn't have good enough lawyers. Now that they've got a precedent set, the government will turn its attention towards paypal. The government can't stand to have any "unregulated" exchange of goods, services, or capital.

        I've seen advice to never leave significant amounts of money in a paypal account (or occasionally even a bank account that paypal knows about), because they occasionally lock it or take it away and make this hard to fix. Does this mean that these stories and whatever prompted them will go away?

      • by scipiodog (1265802) on Tuesday July 22, 2008 @10:36AM (#24289931)

        Don't worry they will. e-gold was just smaller and didn't have good enough lawyers. Now that they've got a precedent set, the government will turn its attention towards paypal. The government can't stand to have any "unregulated" exchange of goods, services, or capital.

        While I do agree with you, I think there's more to this than just regulation.

        The US government (actually the Federal Reserve but by extension their lackeys in the government) is terrified of "competing currencies."

        They come down especially hard on physical currencies, ie. Gold/Silver. Look at the recent attack on the "Liberty Dollar," for an example.

        At the risk of provoking the ire of the anti-Ron Paul people, he's been talking about exactly this for some time.

        Of course, it's quite possible that there actually was money laundering going on (it sounds like there was.) My point is just that these chaps weren't taken down because a) they were too small and didn't have good lawyers or b) just because they were laundering money. If you believe that, I've got a bridge I'd like to sell you...

      • by Stanislav_J (947290) on Tuesday July 22, 2008 @12:59PM (#24292237)

        The government can't stand to have any "unregulated" exchange of goods, services, or capital.

        Like, say, cash. I really feel that the government would eliminate currency in a heartbeat if they could get away with it. Millions of cash transactions take place every day between private citizens, and the government would dearly love to have a piece of the action (as in taxes) as well as the information (who sold what to whom, and when, and why). Not to mention the IRS. (If I pay my neighbor $20 to clean my gutters because I cannot, or he gives me $50 for my old grill when I get a new one, that's income and we're supposed to be honest and report it! Yeah, right...) Cash transactions with businesses are a bugaboo, too, as the government can't easily track your purchases or link you to them. The powers that be are very upset when they can't snoop into your financial affairs.

        The trend away from cash is slow, but steady. The marketplace helps: we have things like the Green Dot debit cards pushed on the lower classes, painting cash as "old fashioned," inconvenient and risky to carry around. Many government payments at all levels, like welfare/unemployment/etc. are now being paid to people not in the form of a check, but on reloadable debit cards. And the fearmongers are doing a great job associating large cash transactions with crime and terrorism -- obviously if you use an untraceable form of payment, you must have something to hide. Just try paying for an airline ticket in cash, or any large transaction (car, etc.) and you will set off at the very least raised eyebrows, and in some cases alarm bells. You can't even purchase above a certain amount in money orders at the post office now without them having to get more details from you (what they are for, where they are going, etc.). The government would adore having every single financial transaction done electronically so that every cent you spend and the recipients of your payments are trackable.

        I own no plastic, save for an ATM card, and make all my purchases in cash. It's just a matter of time before this brands me as an "enemy of the state..."

    • Re: (Score:3, Informative)

      by tokul (682258)

      eGold works with bogus money and is backed by claims of company that it has that amount of gold in safe. Gold standard died more than 50 years ago.

      PayPal works with real money.

      • Re: (Score:3, Informative)

        by darjen (879890)

        What do you mean, eGold works with bogus money? How is US currency "real money" any more than using gold as money?

      • by mea37 (1201159) on Tuesday July 22, 2008 @10:32AM (#24289869)

        Now, I don't know how eGold operates, so there may be a valid point here that I'm not getting...

        But I'm rather confused by what you say. Yes, the gold standard is dead -- that is, gold is not the underpinning of federal currency. However, it remains legal to trade in gold. You can even go to the bank and buy a gold coin (or several) if you care to. (Well, you can if you have that much money sitting around...)

        So it's not clear to me what you're saying is wrong with eGold. They (claim to) hold assets in gold, and use that gold to back transactions... so what?

      • Re: (Score:3, Insightful)

        by prgrmr (568806)
        PayPal works with real money.

        PayPal works with electronic accounting. PayPal employees very most likely handle little, if any, of their customer's money at all. Any money handling is done at the incidental periphery of the transaction involving PayPal, but not by PayPal directly.

        This was the heart of PayPal's defense in New York and Louisiana that they were not a bank, in part because they did not hold or handle customer's money directly.

        Having said that, I think PayPal should be investigated for a
  • by Anonymous Coward

    They go after these egold folks and the liberty dollar folks because they don't want market forces to be able to leave the growing worthless dollar.

    Also bet that Iran will be attacked not for WMDs but because they refuse to trade oil in dollars. These dollar monopolies are one of the few things propping up the dollar and allowing the warfare and welfare state to over-promise.

    I bet the vast majority of these gold trades were not for child exploitation and laundering. They want to be able to run the printing

    • They go after these egold folks and the liberty dollar folks because they don't want market forces to be able to leave the growing worthless dollar.

      I doubt either are significant. The market is abandoning the dollar in favour of the euro. I suppose the US could suspend convertibility of the dollar if they were concerned about that, or fix an exchange rate - but first they'd better ask Zimbabwe what happens when you start playing that game.

    • by phantomfive (622387) on Tuesday July 22, 2008 @11:42AM (#24290903) Journal
      Ah, the fresh smell of slashdot paranoia in the morning. Are you suggesting that the only reason the dollar is worth anything is because of oil? Think about this: the WORLD spends 3.7 trillion dollars on oil a year (2008 estimate). The US produces $13 trillion worth of stuff each year. Even if suddenly everyone tried to get rid of their petrodollars at the same instant, it would not destroy the dollar (hurt it, yes, but not destroy it). There is much more to the US economy than the 'power of the dollar.' There is real production going on there.

      Consider this: is the Euro safer? No, remember that the European bankers didn't change the interest rates this month because of inflation worries.

      Furthermore, you are making a very bold accusation here, that the US will attack for such a small reason. Why not attack Venezuela then, or Columbia, for that matter, when an attack on either place would reward us greatly?
  • uh-oh (Score:3, Funny)

    by jollyreaper (513215) on Tuesday July 22, 2008 @10:05AM (#24289511)

    I heard a rattling in my dryer, opened it up and a quarter fell out. Does this mean I'll be doing a nickel upstate? I knew a guy doing a Susan B. Anthony for movie piracy.

  • Ironic? (Score:3, Insightful)

    by absent_speaker (905145) on Tuesday July 22, 2008 @10:09AM (#24289557)
    "Ironically, one of the reasons that contributed to Flooz's demise in 2001 was rampant money laundering."

    That's really just coincidental.
    • "Ironically, one of the reasons that contributed to Flooz's demise in 2001 was rampant money laundering."

      That's really just coincidental.

      "Using a word in a way other than it's intended meaning - now that's IRONY!!" /Bender

  • Some of us really don't care about money laundering. Punish people for the crime or don't, money laundering is just one of a million charges they either get to pile on top, or slap on anyone didn't feel it was any of their concern how someone makes their money.

    I am far more concerned about having a service for my finances that is not subject to the jurisdiction of the United States or any government

    • Perhaps intentionally helping someone launder their money that you know is dirty should be a crime, since it's conspiracy to cover the trail of the original crime. Having a few people use your service who have dirty money without your knowledge probably shouldn't be.

      • by gclef (96311)

        Then how do you deal with the intentionally ignorant? (Ie, those who might be able to tell that they're being used to launder money, but refuse to look?) Is willful ignorance also illegal? At what point does that line get crossed where you "should have known?"

    • Electronic money is really fascinating from a cryptography point of view. I think that electronic money is necessary for the same reasons that encryption is necessary to enforce privacy of speech.

      And like encryption, it's difficult to boot-strap for similar reasons that encrypted email isn't more widely used.

      I couldn't care less about money laundering, but I do worry about the lead that the US is taking on telling people what they can and can't do with their stored value.

    • Re: (Score:3, Insightful)

      by numbsafari (139135)

      Money laundering is a form of aiding and abetting a criminal act. It is basically a catch-all law for various kinds of fraud that are committed with the express purpose of hiding the source of funds either because they were illegally obtained or because they weren't declared for taxation purposes.

      Very often when someone commits money laundering they are falsifying other financial documents in an illegal manner. Also, in many cases there are persons charged with money laundering who had nothing to do with th

  • Remember kids, buying gold funds terrorism!
  • by bill_mcgonigle (4333) * on Tuesday July 22, 2008 @10:29AM (#24289827) Homepage Journal

    Last year Ron Paul introduced the Free Competition in Currency Act of 2007 [loc.gov] which would make alternate currencies legal, though not change other aspects of what you can do with currencies (e.g. money laundering would still be illegal).

    Few young people realize that until the 1964-1968 time period it was possible to bring your dollars to the government and get precious metal on demand. This gave the dollar real worth. Since that time, the government has found that it can simply make more money out of thin air and spend it on government programs to generate votes. As with any supply and demand equation, when they start running the printing presses to make more dollars, the dollars you have in you bank account become worth less. You're losing money value and the government is gaining money value, but your 'taxes' are low. One can see this in inflation charts which start to skyrocket in the 1970's, relative to decades previous. Interesting note: if we measured inflation today the way we used to back then, our inflation rate would be 11% [mcgonigle.us].

    The Wall Street Journal recently ran a graph showing the value of the dollar vs. gold vs. oil. If we look at the start of the decade until now, if we were holding euros instead of dollars, gas would only be about $2.70 at the pump - that extra $1.30 can be viewed as lost power of the dollar. But, the euro is no panacea either - if you compare the price of gas to the price of gold, it's nearly flat. How about $1.20 gas? I actually saw $5 diesel in CT last weekend.

    Not surprisingly, the government decided to stop keeping track of 'M3' [capitalspectator.com], or the money supply of the dollar recently. Private economists have continued the calculations [shadowstats.com] and it's easy to see why the government doesn't want to talk about it.

    So, back to the beginning, the government has taken irresponsible action with the way it manages the value of its currency, and they have laws preventing people from opting out of their mismanagement. Afraid of a little competition, are they? Experience shows that the most likely effect of competing currencies, even ones that mimic the way the government operated in your parents' generation, would be to pressure the government to exercise some restraint. Of course, if this competition is illegal, they'll continue with their outrageous devaluation.

    Folks who think a little competition helps to keep markets fair, and monopolies hurt them, would do well to contact their representatives in government about the aforementioned bill.

    • Re: (Score:3, Insightful)

      by dpbsmith (263124)

      "Few young people realize that until the 1964-1968 time period it was possible to bring your dollars to the government and get precious metal on demand..."

      All that meant, of course, is that you could bring a dollar bill to the bank and get four quarters in change. Big deal.

      You can still exchange your dollars for precious metal at the local coin shop, by the way.

      • Re: (Score:3, Insightful)

        by numbsafari (139135)

        Funny...

        On a serious note: do we really want the tax dollars of our government being spent on maintaining and distributing massive amounts of gold so that ma an' pa can hide it under their bed?

    • Re: (Score:2, Insightful)

      by Anonymous Coward

      The problem with tying money to scarce resources is that it doesn't allow for any growth. To grow your economy, you have to first mine the gold, and then print the money. You have to pay the miners, of course, which means that over time, you'll use up all of the gold resources which are profitable. This isn't like oil, where consumption of the good forces more difficult extraction techniques to become profitable through sheer scarcity. Rather, in a system like this, you simply must not use up your gold,

    • by NeutronCowboy (896098) on Tuesday July 22, 2008 @10:48AM (#24290091)

      You do realize that basing a currency on the supply of an arbitrary resource is just as foolish, if not more so?

      The reason people abandoned the gold standard was because of two things:
      - random hits to the valuation of a currency due to influx of more resources
      - static size of economy.

      People who pine for the days of the gold standard either never lived through the problems, or have forgotten all about them.

      • Re: (Score:3, Insightful)

        by JesseMcDonald (536341)

        random hits to the valuation of a currency due to influx of more resources

        Sure, if by "random" you mean "not controlled by the Federal Reserve". The U.S. dollar has lost over 95% of its value since the Fed was created and a deliberate policy of continual inflation instituted. The rate of inflation has itself varied quite a bit from year to year as well. Compared to the post-1913 dollar gold commodity currencies are an absolute paragon of both short- and long-term stability, with "gold standard" systems som

    • by areReady (1186871) on Tuesday July 22, 2008 @10:48AM (#24290099)

      A gold-backed dollar is every bit as illusory as a non-backed dollar. The only thing that makes ANY currency worth ANYTHING is that people are willing to accept it and be sure they will be able to spend it themselves. Gold is no more immune to this than paper dollars in the United States - unless the fact that gold is shiny and malleable makes it carry more intrinsic value. The only reason gold has any value is that we assign it value, which exactly why money has value.

      People who think returning to a gold-backed dollar would be in any way useful lack some extraordinarily basic economic education. If we were sticking to gold-backed dollars right now, gold's value would plummet just as much as the dollar's.

      • Re: (Score:2, Interesting)

        by fredrated (639554)

        "The only thing that makes ANY currency worth ANYTHING is that people are willing to accept it"

        Gold has been accepted by virtually all civilizations for thousands of years, probably because it can be worked, is beautiful, doesn't tarnish etc. I and many many others will take gold any day as it is more likely to keep its value than most anything else you can name.

        • by sjbe (173966) on Tuesday July 22, 2008 @12:08PM (#24291401)

          I and many many others will take gold any day as it is more likely to keep its value than most anything else you can name.

          I could say the same thing about any element on the periodic table. Point to any metal on the periodic table and you would have exactly as compelling an argument. We're not making any new platinum or copper either and both are equally useful in a practical sense as gold. Personally I find oxygen, carbon, hydrogen and nitrogen to be FAR more valuable than gold. Perhaps you don't like breathing or food?

          Gold is a fine asset to own but thinking of it primarily as money [wikipedia.org] belies a fundamental misunderstanding of the difference between money and value. I suspect that gold will remain a desirable asset well into the future but I don't expect it to be a better source of value than any number of other metals.

          • Re: (Score:3, Informative)

            by bmajik (96670)

            The history of metallic money is actually pretty obvious. Unlike the paper dollar, if the entire economy built on "IOUs" collapsed, a metallic based currency is still a given amount of metal, metal which can be put to a variety of uses.

            In the earliest trade & barter systems, it was inconvenient to use "cow" as the medium of exchange if you wanted to buy something that you felt was only worth half a cow. Or if your trading partner had no particular use for cows in any quantity, whole or otherwise.

            Metal

      • by Sancho (17056) *

        Gold has intrinsic value in that it is useful. It's used in industry, for example. That, incidentally, makes it a terrible thing to back a currency on. Anyone with half a brain would know that backing a currency on oil, for example, would be foolish.

        Paper money is only intrinsically useful to burn.

    • From the capitalspectator link:

      So, in other words, inflation is only possible if the Fed allows it?
      That's what I believe.

      How can you possibly waste your time listening to these people?

    • Re: (Score:3, Interesting)

      by u38cg (607297)
      Pegging the value of money to the value of metal is stupid. Metal only has the value that we assign to it, and there's no practical difference between saying "This banknote is worth $1000" and "This piece of gold is worth $1000". As for the government printing money to pay its bills, look at Zimbabwe. Inflation, in small doses, is a good thing because it encourages you to use your money rather than hide it under the mattress where it loses value. And as for comparing inflation to serious decades, try go
    • by dhovis (303725) * on Tuesday July 22, 2008 @10:57AM (#24290237)

      Few young people realize that until the 1964-1968 time period it was possible to bring your dollars to the government and get precious metal on demand. This gave the dollar real worth.

      To paraphrase Terry Prachett [wikipedia.org]: "This was true, so long as nobody actually asked for it." The government NEVER had enough gold on hand to back every single dollar in circulation. The last time I had a friend insist that we should be on the gold standard, I did a quick back of the envelope calculation. If you took all the refined gold in the world, all of it, and used it to back the US dollar only, then the price of gold would have to skyrocket to something like $2,000/oz. This assumes that the price would not go up as you try to buy more gold. There simply isn't enough gold, and the rate of gold production was not keeping up with economic growth in the US and around the world.

      Further, I don't understand people who think that the rate of inflation should be pegged solely to the rate of gold mining. Gold isn't particularly rare in the earth's crust, but it is costly to extract. If someone were to develop new technology that extracted gold at significantly cheaper prices, your currency would collapse. This isn't unprecedented. Remember that aluminum was once considered a precious metal until Charles Martin Hall [wikipedia.org] developed an inexpensive electrolytic process for extracting it. From what I hear, there is a new technology coming down the pipe to bring the price of extracting titanium down to the level of aluminum. If something similar happened to gold, a gold-backed currency would be destroyed. In an economy with a fiat currency, you'd just start using the new, cheap gold as a good roofing material.

      • Re: (Score:3, Interesting)

        by DougWebb (178910)

        If you took all the refined gold in the world, all of it, and used it to back the US dollar only, then the price of gold would have to skyrocket to something like $2,000/oz.

        Actually, you've just figured out a ballpark figure of how much the dollar has been devalued since we left the gold standard, when the value of the dollar was set at 1/20th of an oz of gold, eg: 1oz Gold = $20.

        Another example I once read was that 1oz of gold, at $20, used to be enough to buy a very nice suit. Today, with 1oz of gold cost

    • by barnackle (905200) on Tuesday July 22, 2008 @10:59AM (#24290261)

      I know this is not the main thrust of the comment, but it's not practical for money to be backed by gold, diamonds, beads, or fragments of mirrors. Money is backed by what you can buy with it. Then, you say, "what if the economy collapses and no one trusts the dollar anymore?" Well, I don't know about you, but I can't eat gold. Or any other precious metal for that matter. "But you can use the gold to buy food." Ah, only because people trust gold as having value while paper money doesn't. Stepping back a step further, each seems to me to be about as useful as the other for its intrinsic physical properties.

      But I got off track. The main reason precious metals don't make sense as money is the fact that they don't account for the growth of the economy. To simplify things, let's create a little thought experiment and take it to the extreme. What happens when there is no more gold left to pile up in Fort Knox? Does the economy stop growing at that instant? No. People continue to innovate and create value out of nothing using only their minds and bodies. What do we do then? Switch to another precious metal of which we have more? Switch to commodities?

      Or we can just trust eachother. You make something cool and sell it to someone. I make something cool and you use the money you got in your last transaction to buy my cool thing off me. We're just bartering in a huge pool with a little bit of paper to smooth the process.

      To address the concerns of the last poster, all we can do is try to be as transparent as possible. And even then, the economy knows what's happening. The government increases the money supply and the inflation numbers will show it, whether they tell us or not. Just like with anything else we buy and sell. Increase supply and the money value of each individual unit drops.

      • To simplify things, let's create a little thought experiment and take it to the extreme. What happens when there is no more gold left to pile up in Fort Knox? Does the economy stop growing at that instant? No. People continue to innovate and create value out of nothing using only their minds and bodies. What do we do then? Switch to another precious metal of which we have more? Switch to commodities?

        Of course not: each bit of gold/silver simply buys more stuff.

        Now that I've explained the obvious, a good fol

    • by Anonymous Coward on Tuesday July 22, 2008 @11:00AM (#24290267)

      Last year Ron Paul introduced the Free Competition in Currency Act of 2007 which would make alternate currencies legal, though not change other aspects of what you can do with currencies (e.g. money laundering would still be illegal).

      This is the sort of meaningless drivel that marks Ron Paul and his supporters as kooks.

      Today, you are most certainly not obliged to use US dollars. You can use any currency you wish, provided the other party in the transaction agrees. You can take payments in beans, Swiss francs, gold or oil. Many US banks are happy to let you have an account in a foreign currency.

      The only case where you are required to take US cash is for payment of a USD debt (that's the "legal tender" statement you see on USD bills).

      In US states near the Canadian border, you will often see Canadian quarters, nickels & dimes, since they look very similar to US coins and have almost exactly the same value (1 USD is about 1 CAN).

      Few young people realize that until the 1964-1968 time period it was possible to bring your dollars to the government and get precious metal on demand.

      So? Why is gold valuable? It does have some intrinsic industrial value, but the majority of the price of gold is because people think it's valuable. Why do they think it's valuable? Because it's pretty and shiny and people think it's valuable. It's self-fulfilling. It's valuable because people think it is. The degree to which people think something is valuable varies from time to time. iphones seem to be the currency of choice these days.

      The gold standard does prevent some economic problems from occurring, but causes many others. These are well known and have been studied to death by economists.

      Since that time, the government has found that it can simply make more money out of thin air and spend it on government programs to generate votes.

      Government mismanagement & incompetence is not something that only occurs with fiat money.

      • Re: (Score:3, Informative)

        by Hugonz (20064)

        Today, you are most certainly not obliged to use US dollars. You can use any currency you wish, provided the other party in the transaction agrees. You can take payments in beans, Swiss francs, gold or oil.

        False. The government will not enforce such a payment and will enforce payment in legal tender instead, at the rate its courts determine. Also it will accuse you of money laundering, and you will not be able to pay into its coffers in anything other than USD.

    • by i_ate_god (899684)

      I thought the Federal Reserve controls the currency (hence why dollars are legal "tender" now) and it's a corporation unrelated to the government.

  • If you didnt RTFA... (Score:5, Interesting)

    by carp3_noct3m (1185697) <slashdot@noSPam.warriors-shade.net> on Tuesday July 22, 2008 @10:43AM (#24290005)
    E-gold is an online currency service that is backed up by gold. You cannot buy directly from them though, you have to buy through a redistributor, some of which are questionable and only takes certain forms of payment. The nature of the having a third party buy from egold and then sell to another person creates a web of denial effect for money launderes. One of the largest schemes e-gold is used for is in the credit card theft hacker rings, where it is easy to get credit card info, it is harder to "cash out". This is where "cashiers" come in, usually charging a 50 point take on cashing out for someone else. Egold, since it was in a different country, denies US Government requests for transaction records for accounts. E-gold may be in trouble, but for every e-gold there is another replacement, e-platinum, webmoney, and large handful of others. Oh yeah, btw, I didnt RTFA either, I just thought Id share what I know about e-gold, and I might be wrong about some of it.
  • Good riddance! (Score:3, Interesting)

    by swordgeek (112599) on Tuesday July 22, 2008 @10:52AM (#24290169) Journal

    e-gold has tried spam as a marketing tool. When they stopped that, other spammers started following suit, phishing for account info--and e-gold's response was always "it's not our problem."

    They've been actively aiding money laundering, and claiming they can't control what their customers do. Even now, Douglas Jackson is talking about fixing the flaws in an otherwise good system--despite the fact that he's likely going to jail for a few years.

    e-gold is a dirty operation run by dirty crooks. It should be buried deep underground, and the gold reserves (if they really exist) used for something constructive.

  • by BenEnglishAtHome (449670) on Tuesday July 22, 2008 @10:53AM (#24290183)

    For whatever reason, there are times when people pay cash and have no desire to reveal who they are to the folks with whom they are doing business. (I used to relish, back in the day, going to Radio Shack and refusing to give them my zip or other information as long as I was paying cash. They thought I was weird. I thought being forced to identify myself to buy batteries was just too stupid to put up with.)

    So is there any way to anonymously pay for things online? I can think of only one: buy a pre-paid credit card for cash and use it online. Non-reloadable gift cards can be purchased for cash and activated for use online under any name you can think up; there's no verification.

    However, that method is inconvenient. Do the slashdot hordes know of a better, easier way that remains anonymous?

  • Show trial (Score:4, Insightful)

    by geekgirlandrea (1148779) <andrea+slashdot@persephoneslair.org> on Tuesday July 22, 2008 @01:51PM (#24293103) Homepage

    From the article:

    A systemic flaw in the e-gold design, present from the very beginning, made it vexingly difficult for e-gold to expel a User, in a truly effective way, for criminal abuse of the system. e-gold investigative staff might detect suspicious activity, block or freeze the offending account, and later discover the same perpetrator had created additional accounts.

    One element was logic that allowed an e-gold account full privileges from the moment of creation and only revoked those privileges in the event of suspicion that the account holder was seeking to mask their identity or actually engage in illicit activity.

    Um, systemic flaw? How about important feature? Really charming exercise in doublethink there. "We're crippling the anonymity features that made this product worth a damn in the first place, but we're going to *call* it correcting a 'flaw'".

    This is a bloody show trial, that's what it is. It's not good enough to just prosecute their victims, the Almighty State has to ensure they repent publicly, presumably on pain of being fucked over a lot harder during sentencing. "A systemic flaw in the e-gold design...". We have always been at war with Eastasia.

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