e-gold

E-gold was founded by Douglas Jackson, a radiation oncologist,{{cite web|url=http://www.e-gold.com/unsecure/aboutus.html |title=archive.org capture of e-gold Director bios page |date=2004-10-14 |access-date=2014-12-19 |url-status=dead |archive-url=https://web.archive.org/web/20041014062818/http://www.e-gold.com/unsecure/aboutus.html |archive-date=October 14, 2004 }} and Barry Downey, an attorney, in 1996. The pair originally backed e-gold accounts with gold coins stored in a safe deposit box in Melbourne, Florida.{{cite web|title=Synopsis of e-gold Transactions |url=http://www.e-gold.com/unsecure/synopsis.htm#redeem |publisher=Gold & Silver Reserve, Inc. |access-date=8 January 2015 |url-status=dead |archive-url=https://web.archive.org/web/19980627133928/http://www.e-gold.com/unsecure/synopsis.htm#redeem |archive-date=June 27, 1998 }} When e-gold was at its peak, the company stored its gold and platinum in bank vaults in London and Dubai.

By 1998, G&SR was an affiliate member of NACHA{{cite web|url=http://nacha.org/affiliates/affil-curnt-mems.htm |title=archive.org capture of NACHA Affiliates listing, circa 1998 |date=1998-07-09 |access-date=2014-12-22 |url-status=dead |archive-url=https://web.archive.org/web/19980709053800/http://nacha.org/affiliates/affil-curnt-mems.htm |archive-date=July 9, 1998 }} and a full member of NACHA's Internet council.{{cite web|url=http://www.e-gold.com/ |title=archive.org capture of e-gold homepage, circa 1998 |date=1998-06-27 |access-date=2014-12-22 |url-status=dead |archive-url=https://web.archive.org/web/19980627133859/http://www.e-gold.com/ |archive-date=June 27, 1998 }} The company experienced exponential growth starting in 2000.{{cite web|url=http://www.mail-archive.com/e-gold-list@talk.e-gold.com/msg02724.html |title=list post, March 4, 2001 |publisher=talk.e-gold.com (independent discussion list) |date=2001-03-04 |access-date=2014-12-20}} In a July 13, 1999 article in the Financial Times, Tim Jackson (no relation to Douglas) described e-gold as "the only electronic currency that has achieved critical mass on the web".{{cite news |last1=Jackson |first1=Tim |title=When gold makes cents: It may sound crazy, but the eGold payment mechanism based on deposits of precious metal, is cheap, efficient and easy |url=https://www.proquest.com/docview/248786094 |access-date=August 19, 2023 |work=Financial Times |date=July 13, 1999|id={{ProQuest|248786094}} }}{{cite web|url=http://www.repository.law.indiana.edu/cgi/viewcontent.cgi?article=1173&context=facpub |title=Developments in the Law Concerning Stored Value Cards and Other Electronic Payments Products, footnote 154 |publisher=Maurer School of Law: Indiana University, Law Journal |date=2007-01-01 |access-date=2014-12-20}} In 2001, the company said that e-gold had more than 200,000 accounts and more than $14 million of digital gold currency in circulation.{{cite news |last1=Ballve |first1=Marcelo |title=GET READY TO TURN YOUR DOLLARS INTO GOLD -- ELECTRONICALLY |url=https://www.proquest.com/docview/387947777 |access-date=August 21, 2023 |work=South Florida Sun-Sentinel |date=June 24, 2001|id={{ProQuest|387947777}} }} By 2004, there were over a million accounts.{{cite web|url=http://www.e-gold.com/stats.html |title=archive.org archive |date=2004-07-11 |access-date=2014-12-20 |url-status=dead |archive-url=https://web.archive.org/web/20040711020115/http://www.e-gold.com/stats.html |archive-date=July 11, 2004 }}

By the early 2000s, the capability of immediate settlement, as implemented by e-gold, was recognized as key to the emergence of systems for peer-to-peer transfers of digital rights such as "smart contracts".{{cite web|author=Mark Miller |url=http://www.erights.org/talks/pisa/paper/index.html |title=The Digital Path: Smart Contracts and the Third World |date=2002-12-17 |access-date=2015-01-12 |url-status=dead |archive-url=https://web.archive.org/web/20021217211546/http://www.erights.org/talks/pisa/paper/index.html |archive-date=December 17, 2002 }}

E-gold was a founding member of the Financial Coalition Against Child Pornography.{{Cite news |date=2006-03-16 |title=Sites selling child porn targeted |language=en-GB |url=http://news.bbc.co.uk/2/hi/technology/4812962.stm |access-date=2023-08-19}}{{Cite web |date=2007-07-13 |title=Financial and Internet Industries to Combat Internet Child Pornography |url=http://www.ncmec.org/missingkids/servlet/NewsEventServlet?LanguageCountry=en_US&PageId=2314 |access-date=2023-08-20 |archive-url=https://web.archive.org/web/20070713174324/http://www.ncmec.org/missingkids/servlet/NewsEventServlet?LanguageCountry=en_US&PageId=2314 |archive-date=2007-07-13 }} In 2005 and 2006, the company took effective action to combat child exploitation.

E-gold was a target of financial malware and phishing scams by criminal syndicates and was used for illegal activities. In December 2005, the Federal Bureau of Investigation (FBI) raided G&SR's offices, seizing files and hardware, as part of an investigation into e-gold's use in criminal activities. A month later, no charges had been filed against Jackson or his businesses.{{cite news |last1=Monroe |first1=Brian |title=Internet company under scrutiny |url=https://www.proquest.com/docview/239413686 |access-date=August 21, 2023 |work=Florida Today |date=January 6, 2006|id={{ProQuest|239413686}} }}

Because of e-gold's hard money and non-repudiation policies, it was an early and particularly attractive target of phishing attacks against its users.{{Cite web |title=Financial Cryptography: e-gold stomps on phishing? |url=https://www.financialcryptography.com/mt/archives/000190.html |access-date=2023-08-19 |website=www.financialcryptography.com}}{{Cite journal |last=Mullan |first=P. Carl |date=2016 |title=A History of Digital Currency in the United States |url=https://link.springer.com/book/10.1057/978-1-137-56870-0 |journal=SpringerLink |language=en |doi=10.1057/978-1-137-56870-0|isbn=978-1-137-56869-4 }} Attackers also exploited flaws in the Microsoft Windows operating systems and Internet Explorer web browser to collect account details from millions of computers to compromise online accounts, including e-gold accounts.{{cite web|url=http://www.mail-archive.com/e-gold-list@talk.e-gold.com/msg02786.html |title=[e-gold-list] Large Criminal Hacker Attack on Windows NT E-Banking and E-Commerce Sites |publisher=Mail-archive.com |date=2001-03-08 |access-date=2013-09-20}}{{cite news |title=Three organisations targeted by email scams |url=https://www.smh.com.au/technology/three-organisations-targeted-by-email-scams-20031217-gdi04f.html |access-date=October 23, 2022 |work=The Sydney Morning Herald |date=December 17, 2003 |language=en}} In the first half of 2004, e-gold implemented one-time passwords to improve its security.

Jackson said that e-gold is a book entry system with account histories, making it possible to identify users who had engaged in illicit activity.{{cite web|title=DELETING COMMERCIAL PORNOGRAPHY SITES FROM THE INTERNET: THE U.S. FINANCIAL INDUSTRY'S EFFORTS TO COMBAT THIS PROBLEM|url=http://www.gpo.gov/fdsys/pkg/CHRG-109hhrg31467/html/CHRG-109hhrg31467.htm|website=www.gpo.gov|publisher=U.S. Government Printing Office|access-date=8 January 2015}} e-gold accounts were pseudonymous,{{cite web|url=http://blog.e-gold.com/2007/09/buy-online-priv.html |title=e-gold Blog: Buy Online Privately (but not Anonymously) with e-gold |publisher=Blog.e-gold.com |date=2007-09-12 |access-date=2013-09-20}} allowing an account's creator to use any name. Law enforcement could use e-gold's account and transaction records, cross-referenced with data from exchangers, to identify criminal users of the service.{{cite web|url=http://www.kevindowd.org/app/download/8477462997/Contemporary+Private+Monetary+Systems.pdf?t=1380159881|title=Contemporary Private Monetary Systems|website=www.kevindowd.org|publisher=Kevin Dowd|archive-url=https://web.archive.org/web/20150108093517/http://www.kevindowd.org/app/download/8477462997/Contemporary+Private+Monetary+Systems.pdf?t=1380159881|url-status=dead|last1=Dowd|first1=Kevin|access-date=8 January 2015|archive-date=8 January 2015}}

In a lengthy article in BusinessWeek{{'}}s January 9, 2006 issue, a reporter wrote that online payment systems, including e-gold, have become popular among merchants engaged in carding, identity theft, and money laundering. Jackson said that his company has an investigative staff that responds to inquiries from law enforcement agencies, and that his company does not cater to criminals.

The Western Express Cybercrime Group, a five-man fraud syndicate based in Eastern Europe, engaged in carding, selling illegally obtained goods and using e-gold and other digital currencies to store the proceeds.{{cite news |last1=Eligon |first1=John |title=Five More Accused in Credit Card Fraud Investigation |url=https://www.nytimes.com/2009/09/01/nyregion/01cyber.html |access-date=October 23, 2022 |work=The New York Times |date=September 1, 2009}}

In 2007, a U.S. federal grand jury indicted e-gold, accusing it of money laundering, conspiracy, and operating an unlicensed money transmitting business, stating that it knew its service was being abused by identity thieves and child pornographers but did not do enough to stop them. The company denied the charges.{{cite news |last1=Sullivan |first1=Bob |title=Feds accuse E-Gold of helping cybercrooks |url=https://www.nbcnews.com/business/consumer/feds-accuse-e-gold-helping-cybercrooks-flna6c10406525 |access-date=October 23, 2022 |work=NBC News |date=May 2, 2007 |language=en}} In July 2008, the company and its three directors entered into a plea agreement. Douglas Jackson pleaded guilty to operation of an unlicensed money transmitting business and conspiracy to engage in money laundering.{{cite magazine |last1=Zetter |first1=Kim |title=E-Gold Founder Pleads Guilty to Money Laundering |url=https://www.wired.com/2008/07/e-gold-founder/ |access-date=October 23, 2022 |magazine=Wired |date=July 25, 2008}} In November 2008, 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. Jackson had faced a maximum sentence of 20 years in prison and a $500,000 fine. Judge Rosemary Collyer opted for a much more lenient sentence because of Jackson's significant personal debt. "Dr. Jackson has suffered, will continue to suffer, and may never be successful with e-Gold," said the judge.{{cite news|url=https://www.cnet.com/tech/tech-industry/judge-spares-e-gold-directors-jail-time/|title=Judge spares e-Gold directors jail time|author=Stephanie Condon|date=2008-11-20|publisher=CNET}}

Reid Jackson, Douglas's brother, and Barry Downey, a company director, were each sentenced to three years of probation and 300 hours of community service, and ordered to pay a $2,500 fine and a $100 assessment.

E-gold's plea agreement included a forfeiture of about $1.2 million to the government, a $300,000 fine, and a condition that Douglas Jackson impose know your customer (KYC) rules on e-gold customers. Customers who lived in high-risk countries or who had not completed KYC verification were limited to low or no transaction rates.{{cite magazine |last1=Zetter |first1=Kim |title=Bullion and Bandits: The Improbable Rise and Fall of E-Gold |url=https://www.wired.com/2009/06/e-gold/ |access-date=October 23, 2022 |magazine=Wired |date=June 9, 2009}} e-gold announced a claims process in December 2010, and launched it in June 2013, for account holders to access the funds they had deposited. As of November 2013, users could not use e-gold's web site for other purposes.{{cite news |last1=White |first1=Lawrence H. |title=THE TROUBLING SUPPRESSION OF COMPETITION FROM ALTERNATIVE MONIES: THE CASES OF THE LIBERTY DOLLAR AND E-GOLD |url=https://www.proquest.com/docview/1532503869 |access-date=October 23, 2022 |work=Cato Journal |issue=34/2 |publisher=Cato Institute |date=Spring 2014 |pages=281–301|id={{ProQuest|1532503869}} }} Jackson told the Financial Times in a November 2013 article that he had hoped to resurrect e-gold himself, but that he had not been able to obtain the licenses required in most US states.Stephen Foley, November 28, 2013 [http://www.ft.com/cms/s/0/f7488616-561a-11e3-96f5-00144feabdc0.html E-gold founder backs new Bitcoin rival], Financial Times

• Digital currency
• Digital currency exchanger
• Gold as an investment
• Liberty Reserve

{{Reflist|30em}}

• {{official website|http://www.e-gold.com/}}

{{Digital gold currencies}}

{{DEFAULTSORT:E-Gold}}

Category:Digital gold currencies