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