For those of us that have been surfing the Internet for over a decade now, the news of E-gold Ltd. filing for Chapter 7 bankruptcy today was indeed news. I have seen so many different business models come and go over the years, it seemed if a business lasted a decade on the web they were going to make it. E-gold was an innovator of sorts, they saw the need with the new web economy to be able to move money around the world and decided to use gold to back these transactions. E-gold was seen as offering the first truly borderless global currency system which was independent of exchange rate variations found in fiat currencies.
Little history E-gold.com was founded in 1996, it is a digital gold currency which allows the instant transfer of gold ownership between users. They have over 3 tonnes of gold bars in their system and what is impressive with this number it matches the national reserves of some small countries. A user who wants to send money to another E-gold user simply uses the sites web interface and transfers their equivalent share of gold to another user. I had my own experience of using them over 5 years ago, I had setup an account thinking it would be a good place to put some money since it was backed by gold without having to store the gold in my house. However I never went through with funding my account. See E-gold uses digital currency exchangers, these are full time business that buy and sell digital gold currency for national currencies ie. US Dollars. I think I got cold feet because I thought in the back of my head, how do I know if my money is really backed by gold stored away in some lock box? Later I discovered that once you funded your account you could use the sites “examiner” feature you can see the exact serial numbers of the gold bullion bars that secured your funds.
The gold bars began tumbling down around E-gold.
Last year April 2007 a Federal Grand Jury handed down an indictment charging e-gold Ltd. and Gold & Silver Reserves, Inc. with money laundering, operating an unlicensed money transmitter business. Chairman and Founder of E-Gold, Dr. Douglas Jackson denied these charges and posted a long letter to e-gold members giving his side of the story. There is no doubt that the seizure of a lot of e-gold account really hurt the image of e-gold, but the declaration of bankruptcy just seemed to be one last step saying we thrown in the towel.
If you still have an E-gold account you might consider taking your money out as soon as you can, if it is not too late. While reading the bankruptcy petition there was a statement that gives a glimpse of things to come:
“We, Douglas Jackson and Barry K. Downey, announce the possible massive ddos-attacks due to the declared bankruptcy of E-gold Ltd. and Gold & Silver Reserve (G&SR) Inc., hereupon the system may operate unstable.”
DDos = distributed denial-of-service attack “aka” the site is going to be down for awhile.
[...] like to apologize to E-Gold Ltd and its partner companies for an recent article we posted titled E-Gold Files For Bankruptcy. Based on a new article posted at the E-Gold.com blog titled Fraudulent “Press Release” [...]