Cyber-fraudsters bookmark e-gold

By Matt Chapman on May 14, 2007 2:13 PM
Filed under Security

Online payment service popular with con-men, alleges security firm.

A "significant portion" of business transactions being carried out between online fraudsters allegedly use the e-gold payment service, according to a security company.

RSA said that it had noticed a sharp rise in the use of the electronic currency service.

"While monitoring the fraudsters' communication channels, RSA has learned that most fraudsters prefer to pay and get paid using an e-currency called e-gold," said an RSA statement.

"A phrase such as 'I accept e-gold' is very common in fraudster negotiations and in posts in their web forums."

On 24 April a Federal Grand Jury indicted directors from e-gold and the Gold & Silver Reserve for money laundering, operating an unlicensed money transmitter business, and conspiracies to commit both offences.

The US government also accused e-gold of allowing paedophiles to pay for child porn using the service.

Dr Douglas Jackson, chairman and founder of e-gold, hit back at the allegations and likened them to the claims of witchcraft during the Inquisition, which were used to justify torture and the seizures of property.

"With regard to child pornography, the government knows full well that their allegations are false, yet they highlight these irresponsible and purposely damaging statements in order to demonise e-gold in the eyes of the public," Dr Jackson said.

RSA claimed that its investigations had found that the amount of discussions regarding the use of WebMoney is also on the rise.

"Issues such as registering accounts, funding and cashing out WebMoney accounts are discussed much more than before," the company said.

"More fraudsters are starting to accept WebMoney as well as e-gold, and some of them have even switched to WebMoney completely, and do not accept e-gold payments anymore."