Since 1996 e-gold has enabled consumers to use private digital currencies backed by precious metals. In April a federal grand jury indicted the enterprise, its parent company, and three of its officers on charges that include money laundering, conspiracy, and operating an unlicensed money-transmitting business.
The company has been under investigation since before a 2005 Secret Service raid that ended with no charges filed. When it announced the new indictments, the Department of Justice declared that "the E-Gold payment system has been a preferred means of payment for child pornography distributors, identity thieves, online scammers, and other criminals around the world to launder their illegal income anonymously."
E-gold's founder, Douglas Jackson vehemently denies the accusations. Whenever law enforcement officials inform the company of suspected criminal activity using e-gold, he says, the company shuts down the accounts used for such purposes. He also notes that the business is a founding member of the National Center for Missing and Exploited Children's Financial Coalition Against Child Pornography, dedicated to finding and stopping online sellers of child porn.
Jackson claimed in congressional testimony last fall that e-gold was second only to PayPal in the online transaction business, with 3 million e-gold accounts held in 165 countries, doing transactions totaling $2 billion a year. But the DOJ seized his company's assets of $1.5 million in e-gold along with the indictment. Between that and its now-tarnished reputation, e-gold's future will be in serious doubt whatever the outcome of the trial.