E-gold owners plead guilty to money laundering

Wow, big morning!  If anyone has seen Nitesh Dhanjani and Billy Rios's talk on phishing and identity theft, which was presented at the last couple Black Hat conferences, and will be on display again at Black Hat Vegas, you know that the identity theft market is a huge problem.  You might also remember that the market is an individual ecosystem that has market swings, fluctuations in cost based on local of the stolen identity, etc.  If you were really paying attention, you might even remember hearing that these criminals were blatantly accepting payment for their services, as advertised on their websites, through e-gold.

Well, well, well, strike another win for the good guys in the battle against identity theft, which is great news considering we just had a big victory last week as well!

Read the rest below.

From Slashdot this morning:

The three owners of Internet currency service e-gold have pled guilty to money laundering in the U.S. District Court for D.C.. The service is based in the West Indies, but the directors apparently live in Florida. They haven't been sentenced yet, but potentially face decades in prison and millions in fines. In addition, the principal director (Douglas Jackson) posted a blog entry yesterday saying that 'criminal activity will not be tolerated,' and pledging to eliminate the loopholes that allowed money laundering to thrive on the service. He also claims that e-gold has more transaction volume in a single quarter than all of the first-generation Web currency services like Cybercash, Beenz, and Flooz completed over their lifetimes. Ironically, one of the reasons that contributed to Flooz's demise in 2001 was rampant money laundering.

I find it interesting that in the course of laying out his "we're changing for the good message", Douglas Jackson goes on to speak of his company's success, claiming that "e-gold has more transaction volume in a single quarter than all of the first-generation Web currency services..."  Um, yeah, we know... you just mentioned the criminal element of your business, so what you're telling us is that you are really, really good at money laundering?

Of course, I'm sure we can expect something else to pop up, but for the short term, this is a victory.

-Nate