| Business always moves faster than government ...It's | | | | been very specific in their nature, because major |
| no surprise that a great deal of lawmakers' time is | | | | banks have enough financial and political clout to |
| spent reacting to advances in commerce and science. | | | | strike back at anything less.An example of a precisely |
| It's also no surprise that one of their favorite tactics | | | | identified transgression is the Citigroup private |
| is to call on their enforcement agencies to bring | | | | banking scandal in Tokyo in 2004. The Japanese |
| scrutiny against any topic about which they're | | | | authorities said the bank helped clients manipulate |
| struggling to understand.We're now seeing this applied | | | | accounting records through improper real estate |
| against at least two e-currency operations.One of | | | | transactions, failed to process tax refunds for clients |
| them, INT Gold, saw their head offices in Texas | | | | and mismanaged customers' confidential information. |
| raided by the FBI in December. No arrests were | | | | As a result, they ordered Citigroup's Japanese private |
| made and no disclosures were presented to indicate | | | | banking operations to close, but took measures to |
| the reason for their actions. The only auspices | | | | ensure all unaffected investors would be minimally |
| mentioned were that they were pursuing an ongoing | | | | affected while they moved their accounts.Rarely, |
| fraud investigation. It's now been over a month and | | | | total loss to depositors happens. The Silverado |
| nothing further has happened.At roughly the same | | | | collapse in Colorado sent Charles Keating to prison for |
| time, e-Gold was also served with a search warrant. | | | | what should be a thousand life terms, as more |
| It seems the justification was petty --- they allegedly | | | | people than that lost their life savings. It's notable |
| didn't have a 'required' currency-exchange license --- | | | | that this occurred in what was a laissez-faire junk |
| and they were upset enough to place the following | | | | bond scenario.Raids only receive mention when it |
| posting on their website:e-gold(R) welcomes US | | | | serves the authorities' purposes to do so. One reason |
| Government review of its status as a privately | | | | for this is because the searches and/or seizures don't |
| issued currency | | | | yield sufficient results to merit charges being filed. |
| January 20, 2006"Starting in mid-December 2005, | | | | There can exist a vast gray area in modern financial |
| Gold & Silver Reserve, Inc. (G&SR), contractual | | | | activities, and when the fine print of a certain |
| Operator and primary dealer for e-gold, has been the | | | | situation is scrutinized, it often occurs that, perhaps |
| subject of a warranted search of its premises and | | | | those activities have sailed close to the legal wind, |
| records, had its domestic bank accounts frozen, and | | | | but they did not take the airs of disrepute.It remains |
| been the target of a precisely timed, extraordinarily | | | | to be seen what they're investigating at INT Gold. As |
| misleading attack by a major business publication."In | | | | opposed to their treatment of major banks, the |
| an emergency hearing in US District Court January 13, | | | | nature of the authorities' announcement of this raid |
| 2006, the freeze order on G&SR's bank accounts | | | | was quite vague, which I'm sure was by design. So, |
| was lifted. Though numerous criminal claims had been | | | | the issue is one of whom they were attempting to |
| made in obtaining the search and seizure warrants, | | | | stir. However, American law says the parties involved |
| the Government has not sustained these allegations | | | | are innocent until proven guilty, so they should duly |
| and the only remaining claim is a contention that | | | | be accorded that right. Until the entire story comes |
| G&SR has operated as a currency exchange without | | | | to light, it's improper to cast aspersions. After all, as |
| the proper license. G&SR had previously proposed to | | | | with most raids at major banks that go unpublicized, |
| the Government that e-gold be classified for | | | | it may be that the transgressor is not the company, |
| regulatory purposes as a currency, enabling G&SR to | | | | but a client who has abused its privileges within that |
| register as a currency exchange. In a Treasury | | | | company's facilities.The e-currency investigations are |
| report released January 11, 2006, however, the | | | | surely a result, in part, of one government's indecision |
| Department of Treasury reaffirmed their | | | | as to how to regulate e-currencies within their |
| interpretation of the USC and CFR definitions of | | | | borders when those currencies are neither fiat nor |
| currency as excluding e-gold."G&SR, for nearly a | | | | necessarily domiciled within those borders.This |
| year, has been engaged with an agency of Treasury | | | | reminds me of broadcasting's early days, when the |
| in a BSA (Bank Secrecy Act) compliance examination | | | | Feds were perplexed about how to best cope with |
| it had voluntarily initiated. G&SR, though preferring | | | | radio signals that only obeyed the laws of physics |
| that the venue was not a courtroom, welcomes the | | | | and thus had the ability to cross state lines without |
| opportunity to extend its discussions with the | | | | governmental permission. As ridiculous as that sounds |
| Government on how best to achieve appropriate | | | | today, the thought of a particular technology being |
| statutory or regulatory cognizance of e-gold while | | | | more advanced than political and/or geographical |
| continuing to build e-gold's market share as a medium | | | | delineations was of deep concern to them. It |
| of international commerce."Despite the unfounded | | | | ultimately took nearly 15 years for the American |
| charges and adverse misleading publicity that have | | | | government to create the Federal Communications |
| severely damaged both e-gold and G&SR, G&SR has | | | | Commission to cope with such an 'advanced' business |
| continued to meet all financial obligations and remain | | | | as interstate broadcasting.Given the fact that |
| completely operational. e-gold remains highly | | | | e-currencies are privately generated and |
| committed to its goal of bringing, for the first time in | | | | administered, and given that no central monitoring |
| history, to people of any financial means across the | | | | system exists to aid in their regulation, it is no |
| globe, a secure payment mechanism at a fraction of | | | | surprise under the current environment of American |
| the cost of any other system. e-gold fully expects to | | | | laws to now see a bustle of authoritarian attention |
| transcend the unfortunate events of the past month | | | | directed toward them. Until they are able to |
| and resume its exponential growth."Further | | | | determine a palatable policy, the best they can do is |
| information can be found at: | | | | assume a self-righteous position in the interests of |
| | | | 'consumer protection' and cast aspersions by means |
| proactive approach by e-Gold should be applauded. | | | | of rationalization. It's not particularly fair, but as we've |
| INT Gold should have done the same thing.If more of | | | | seen in related online forums, it's quite |
| the public only knew how many times search papers | | | | effective.Hopefully, the issue will be settled in a much |
| were served on financial institutions for one reason | | | | more expeditious manner than it was in |
| or another, they'd no doubt be as skeptical as I am | | | | broadcasting.J Square Humboldt is the featured |
| about the publicity the authorities have given their | | | | columnist at the Longer Life website, which is |
| actions against these two e-currency companies.Let's | | | | dedicated to providing information, strategies, analysis |
| consider how authorities move against major banks | | | | and commentary designed to improve the quality of |
| when wrongdoing is suspected. One characteristic | | | | living. His page can be found at and his observations |
| which becomes quickly evident is that any releases | | | | are published three times per week. |
| issued by the investigating authorities have always | | | | |