At 09:47 AM 1/3/2006, R. A. Hettinga wrote:
http://www.paymentsnews.com/2005/12/egold_under_scr.html#more
Payments News
December 31, 2005
E-Gold Under Scrutiny
January 9th edition of Business Week contains a lengthy investigative report by Brian Grow on online money transfer systems like e-gold Ltd. The article focuses on the potential use of the e-gold payment service by those wanting to move money while skirting the reporting obligations associated with US money laundering regulations.
There has been quite a bit of on-line discussion about this article and, except for a notable competitor to E-Gold, the consensus among DGC users is that this article appears to be yet another hatchet-job perhaps encouraged by regulators or law enforcement to smear on-line payment services not sucking up to authorities. For example, while its true that E-Gold does not do much KYC checks that's not its legal responsibility nor in concert with its ToS, which they appear to follow. Almost all KYC responsibility for E-Gold falls on its exchange agents. The IMF estimates that the "shadow economy" runs from 14-16% of the GDP in OECD countries up to 44% in the Developing countries and you can bet very little of this is passing through these 'rebel' on-line payment services. Also, its quite simple to use Western Union and other popular services with little or no ID for smaller payments (although the details of even smaller transactions are probably forwarded to LEOs for scrutiny). Steve