Wow! That’s all that I could think to myself when I read the latest posting on e-gold’s blog. E-gold has been through so much hardship; asset seizure by the government, tarnished reputation, liquidity problems, shutdown of its primary exchange agent, criminal charges pressed against e-gold’s principals, etc. But thankfully there was light at the end of that tunnel. E-gold has been given a new chance at life and I’m immensely glad because of it. I still remain optimistic about e-gold’s future in spite of all the problems it has suffered and look forward to seeing e-gold crystallize into a better, sounder, more respected institution and a valuable participant in today’s global financial industry.
Before I forward you off to e-gold’s official blog posting, permit me to summarize how things stand as they are.
1) The e-gold criminal case has been resolved. E-gold’s principals have plead guilty to the charges brought upon them and sentences are soon to be handed out. Stay tuned here as I will inform you all of the latest news as it happens.
2) E-gold makes important changes to its User Agreement:
2.3. User agrees to not use e-gold in any manner that violates the laws of whatever jurisdiction to which the User is subject.
126.96.36.199. If e-gold investigators reasonably suspect that the e-gold account of User is being used to launder the proceeds of crime or for any other criminal purpose, Issuer may freeze the e-gold account and any other e-gold accounts of User. Additionally, at the sole discretion of Issuer, User will be subject to damages and other penalties, including criminal prosecution where available and the notification of the general public of User’s actions, at the sole discretion of Issuer.
3) E-gold admits the existence of a design flaw in their system. This is related to e-gold’s account creation and provisioning logic.
The next generation of the e-gold application will undertake to enforce a “one-human being/one e-gold User” rule. Instead of the existing logic where a User logs directly into an account, a User in the next generation system logs in as a User. Only validated Users are empowered with the ability to create multiple accounts.
The advantage from the cybercrime-thwarting standpoint will be an ever-stronger ability to blacklist a person who has abused the e-gold system.
These changes will however take time to implement, but in the meantime e-gold’s founder, Douglas Jackson, believes more immediate measures have to be implemented – or “emergency surgery” as he calls them. The measures are as follows:
1) Effective immediately, new e-gold account creation is suspended until a compliant interim solution for Customer Identification can be ensured.
2) We are requesting that autoexchangers – even though the technical beauty of the autoexchanger concept is sublime – cease supporting exchanges to or from e-gold for the time being. The problem with the autoexchanger concept is that although the autoexchangers themselves may be perfectly compliant with requirements [promulgated by Webmoney and e-gold] to automatically put tracking data in their memo fields, and despite the fact that Webmoney is also committed to aiding in the suppression of cybercrime, the fact is that a substantial proportion of the cybercriminals that abuse e-gold have evolved into a modus operandi that involves autoexchanging possible proceeds of crime into Webmoney, sometimes within minutes of receiving the value, thus making interdiction a matter of catch-up or closing the barn door after the horse is gone.
You can find e-gold’s full news release over here: