E-Gold Gets Tough on Crime

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The founder of PayPal competitor e-gold has grown tired of the government characterizing his business as a haven for money launderers, terrorists, child pornographers and credit card thieves. So a year after the Department of Justice raided his offices, Douglas Jackson, president of Gold and Silver Reserve, which operates e-gold, has been wading deep into his customer transaction logs to identify and fight back against people who misuse his system. In the last month, he's blocked about 2,000 accounts from his system, and he's voluntarily turned over detailed account and transaction histories to federal law enforcement. In the process, Jackson says he's exposed an illicit and previously invisible economic underground. "It's like discovering an undisturbed tomb in Egypt where you've got this archaeological thing," Jackson says about the wealth of data he's uncovered. "There will never be another crack like this one where all of these people have left their footprints with memos that sometimes give us clues as to what they're doing." E-gold is a privately issued digital currency backed by real gold and silver stored in banks in Europe and Dubai. Jackson says about 1,000 new e-gold accounts are opened daily, and the system processes between 50,000 and 100,000 transactions a day. With a value independent of any national legal tender, the electronic cash has cultivated a libertarian image over the years, while drawing the ire of law enforcement agencies who frequently condemn it publicly as an anonymous, untraceable criminal haven, inaccessible to police scrutiny. Jackson says the image is false. Although a user can open an account using a fraudulent name and a proxy server that shields his or her IP address, a permanent record of every transaction remains in the e-gold system, which can help law enforcement agencies track criminals. Read the whole story here: http://www.wired.com/news/technology/0,72278-0.html?tw=rss.index