The history of e-gold

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E-gold was a private digital currency founded in 1996 by Dr. Douglas Jackson and Barry K. Downey. It facilitated the transfer of gold between members of their website instantly using modern technology1. The service was unique as it was purely digital and allowed users to make payments, which it called "spends", in grams of gold, silver, and other precious metals4. At its peak in 2006, e-gold processed more than US$2 billion worth of spends per year, backed by over US$85 million worth of gold, about 3.8 tonnes (8,400 lb)4. However, e-gold quickly became a haven for criminals due to the irreversibility of the gold transfers, making it an indispensable tool for money launderers, identity thieves, fraudulent “financial” investors, and purchasers of child pornography1. The U.S. government mandated e-gold to block several e-gold accounts running services similar to e-gold in 20071. The crux of the argument against e-gold was that it did not do enough to prevent illegal activities by not having a mechanism in place that stopped fraudulent users from just creating new accounts1. There was also the issue of e-gold being an unlicensed money transmitting business1. In 2007, the US Federal government accused e-gold of money laundering and other crimes and closed down several exchanges10. Despite this, e-gold itself was then indicted and forced to block all accounts and transfers10. E-gold still technically remains in business today, but is no longer accepting new accounts or transfers of e-gold from user to user1.
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