Douglas Jackson from e-gold about money laundering and the coming changes

In a recent press release Douglas Jackson, CEO of e-gold expressed his regret regarding the criminal incidents that had an adverse effect on the company’s reputation and advised about some innovations planned to be introduced to make the work of e-gold more efficient and secure.

In Mr. Jackson’s view “e-gold's failure to emerge so far is a result of many factors but the root causes were design flaws in the account creation and provisioning logic that led to the unfortunate consequence of vulnerability to criminal abuse.”

He underlined that such criminal abuse turned to a degree when the intervention of the US Department of Justice became inevitable which resulted in the criminal charges against e-gold Ltd., Gold & Silver Reserve., Inc., (the Operator of e-gold and also of the online exchange service OmniPay) violations of 18 USC 1960 [Operation of an unlicensed Money Transmitting Business] and 18 USC 1956 [Conspiracy to Commit Money Laundering]. Mr. Jackson notes that although the criminal case was resolved, one fact stays evident – e-gold should address the flaws embedded in the e-gold system. Besides, he emphasized that it was time to transform the "e-gold Operation" into the institution that serves to advance the material welfare of the mankind.

“In harmony with this transformation, we acknowledge that e-gold is indeed a Financial Institution or Agency as defined in US law and should be regulated as a Financial Institution. E-gold Ltd. has submitted an application to FinCEN to be registered as a Money Services Business and will be seeking licensure in all states that require it. Most importantly, working in conjunction with US government agencies, we will be exerting every effort to bring e-gold into compliance with US law and regulation as quickly as possible,” said Mr. Jackson.

In order to prevent future violations e-gold will enter some new articles into its User Agreement. The articles will oblige users not to use e-gold in any manner that violates the laws of whatever jurisdiction which the User is subject to.

Besides, an unrestricted ability for Users to create multiple accounts without any obligatory indicator that they were all under the control of one person is to be diminished.

“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,” he stated.

As per Mr. Jackson’s statement e-gold is intensively working on this next generation User-based log-in system but it is likely to be another 6-9 months to deployment.

In the end Mr. Jackson appealed to autoexchangers requesting them to cease supporting exchanges to or from e-gold for the time being. He explained 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.”

“We are confident that a regulated e-gold rebuilt to a more systematic specification will be less hospitable to criminals, and more attractive to mainstream business use without being less accessible to those disregarded by legacy payment systems,” he concluded.