From SecurityFocus,

“On Monday, the Nevis, West Indies, company, its founder and two senior directors all agreed to plead guilty to various charges related to money laundering and the operation of an unlicensed money transfer business. The agreement ends a nearly four-year investigation into the company and its digital currency service, which — because of the anonymity it provided account holders — became a popular method for cybercriminals to turn ill-gotten proceeds into clean cash.”

E-Gold is the preferred method of payment on all the underground marketplaces we monitor. Does anyone without a court order or warrant have any idea the volume of exchanges (from real to virtual currency and back) they perform? They get a cut both ways. With almost 7 million grams of precious metal in stock, they can back a huge volume of transactions. When E-Gold is bought, part of that stock is used to back it, but it’s released again when E-Gold is exchanged for real currency.

At the end of the day, it looks like E-Gold will continue to operate regardless of the guilty pleas and I doubt they will do much to stem the exchange of ill-gotten gains through their service. If they change their operations so that anonymity is no longer an element of the service, the criminals will just do what they do at other, less convenient services: they’ll lie about who they are.

This entry was posted on Friday, July 25th, 2008 at 2:23 pm.

Share This Information | Cleaning Up E-Gold? Not Likely. SlashDot | del.ico.us | Digg it | Technorati | Reddit

Other SecureWorks Blog Categories: General (20) Links (7) Phishing (1) Research (60) Spam (1) Trojans (4)