Transaction law sound, says e-gold

R.A. Hettinga rah at
Mon Jan 31 10:05:28 PST 2005


Australian IT

Transaction law sound, says e-gold
Simon Hayes
FEBRUARY 01, 2005

INTERNET currencies are capable of catching money launderers and terrorist
financiers without additional financial transactions reporting legislation,
the backers of a major global payments system have argued.

E-gold founder Douglas Jackson said his financial system, in which value is
guaranteed by gold deposits, was "always getting beaten up" over
money-laundering concerns.

 He was responding to moves by the federal Government to update the
Financial Transactions Reports Act to include payment systems such as
PayPal and e-gold, which escape regulation because they are not categorised
as "cash dealers".

 The legislation, expected soon as an exposure Bill, is designed to plug
holes identified last year during an inquiry by the joint committee of the
Australian Crime Commission.

 Dr Jackson, who is chairman of e-gold's US owner Gold and Silver Reserve,
said he did not oppose more regulation, but existing laws were adequate.

 "There are already all sorts of regs to cover people accepting money
payments," he said.

 "It's hard to see what additional need there is."

 Gold and Silver Reserve does not transfer payments from cash or to cash.

 The only way to build a balance in an account is by "earning" it, for
example by selling an item online.

 "If you try to be sneaky and provide incorrect contact information for
your account, and you think you are anonymous, the moment you have value in
your account it's discovered," Dr Jackson said.

 "We commonly receive court orders for someone who has done something
that's naughty, and we are yet to find a case where the guys aren't nailed,
and we love doing that."

 Dr Jackson, a radiation oncologist, left medicine to found Gold and Silver
Reserve in 1996. His fellow director is Baltimore lawyer Barry Downey.

 "Our approach is radically different from PayPal," Dr Jackson said.

 "E-gold is organised more like a currency in its own right. What we're
trying to achieve is freedom from default risk.

 "We're not opposed to regulation but often we're the round peg in the
square hole. There's concern that internet payment systems can hide the
proceeds of crime, but with gold it makes no sense."

R. A. Hettinga <mailto: rah at>
The Internet Bearer Underwriting Corporation <>
44 Farquhar Street, Boston, MA 02131 USA
"... however it may deserve respect for its usefulness and antiquity,
[predicting the end of the world] has not been found agreeable to
experience." -- Edward Gibbon, 'Decline and Fall of the Roman Empire'

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