July 10, 2007 9:06 AM
All that is e-gold does not glitter
Online payment provider e-gold has acquired a reputation as a conduit for criminals to launder ill-gotten gains.
The company has always defended itself robustly – including to Techworld - but more evidence has emerged this week that won’t do the company’s image any good.
The US Secret Service has just caught a major criminal gang accused of running accounts on the service that were used to pay Eastern European criminals for stolen credit card information. This wasn’t a small affair either, as the accusations make clear. The criminals in question would have depended on such “no questions asked” accounts to run their business.
Can companies be held responsible for how customers use their services? Legally, the answer is a resounding yes. Even though the new case does not directly implicate the company's management in any way, the founding principle of the service has always been anonymity, a feature that sits uneasily with conventional concepts of money management. In the past, the company appeared to carry out no checks on its customers whatsoever, which is why criminals gravitated to it.
The US authorities have taken an angry interest in e-Gold in recent times, and further back in time was the case of the cyber-criminals who attempted to extort funds from malware victims by making payments through e-gold.
E-Gold is not unwilling to defend itself. In the interest of fairness, here is its take on the case put against it by the US authorities.