Bitcoin Gold – The Biggest Cryptocurrency Scam?

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Lately, there have been lots of talks about bitcoin gold being a scam. Many rumors stated the folk has already been performed.

In order to satisfy my inner curiosity, I decided to do some research on it. So, I went to their official website to get more knowledge about the project. There was nothing to be found on the website except for a logo, the date and some social media links.

No other information at all. I dug in deeper and I found this reddit post which confirmed that it was a scam. DO NOT share your private key. Except for the bad English, their claim website looks legit, at first glance at least — thus amateurs might easily believe it and get scammed.

You can get some more info about the ICO here and here. Thus, the Bitcoin gold hard fork. By using a wayback machine, you can see how different their website looked on August 31 here. But, at the time e gold and bitcoin scam writing this article, we are currently on the th block for BTC right now.

And now they are in the process of adding a e gold and bitcoin scam of 16, blocks to the end of the chainbitcoin gold in total. Either that or maybe they might have changed the block number for the fork.

As soon as people will start joining the pump rally for BTG they will dump their premined coins aroundBTG and you will be stuck with some worthless coins. No change of difficulty algorithm has been implemented. This is a major setback. For those of you who do not know why it is important, without replay protection, there is a chance of you losing your Bitcoins if you try to sell or transfer your airdropped bitcoin gold.

Thus, even if this project is legit and not a scam, I highly doubt bitcoin gold will have any real value. Assuming it did get some value initially due to the hype, the developers, in order to make some quick bucks, will dump their premined coins ASAP, and you will e gold and bitcoin scam left only with some worthless coins.

Thus, I would highly recommend you stay away from BTG as much as possible. Majority of the people are selling altcoins at a loss and moving into bitcoins to gain some free bucks BTGthus reducing the altcoin e gold and bitcoin scam. As soon as the fork news will settle down, these same people will try to rush back into the altcoins at higher prices due to FOMO as the altcoin prices start spiking up.

How stupid can people be. I suggest you act smart. While everyone is selling their altcoins at losses, you accumulate as much as possible at these dirt-cheap prices to reap some great gains in the upcoming month.

Your e gold and bitcoin scam address will not be published. I, too, was planning to do the same. But, is it really a good idea? At first, I thought they were just some random rumours. According to the snapshots: Does this mean the fork has already happened? How stupid can people be I suggest you act smart. If you liked this post e gold and bitcoin scam want to get updates about our future posts subscribe below. Leave this field empty if you're human: Leave a Reply Cancel reply Your email address will not be published.

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The e-gold system was launched online in and had grown to five million accounts by , when transfers were suspended due to legal issues. E-gold was founded by oncologist Douglas Jackson [5] and attorney Barry Downey in The pair originally backed the services accounts with gold coins stored in a bank safe deposit box in Melbourne, Florida. The company was launched two years before PayPal but did not manifest exponential growth until After initial demonstration of an e-gold Spend via Palm Pilot in February , [16] e-gold introduced support for wireless mobile payments.

E-gold was used by both individuals and merchants for services including metals trading, [19] online merchants, [20] [21] online auctions , online casinos , [22] political organizations, [23] and non-profit organizations. It also tended to inhibit third parties from offering exchange services on an independent competitive basis.

In , the system was re-structured [28] to effect a separation of currency exchange activities from the core functions of e-metal issuance and settlement of transfers. Beginning spring , there was a proliferation of independent exchange services [31] [32] [33] [34] [35] [36] marking the first emergence of an industry providing exchange between conventional national currencies and a privately issued brand of money.

By , several dozen companies and individuals from around the world were offering third party exchange services between national currencies and e-gold, further extending e-gold's international user base. E-gold, which allowed transactions as small as one ten-thousandth of a gram of gold, was also the world's only successful micropayment system.

The company's payment statistics were published live and showed hundreds of thousands of micro-transactions were being made daily by computer programs using the API. From its inception in , e-gold pioneered the decoupling of the numeraire for specifying a payment Spend instruction from the native unit of account of the settlement currency.

Calculation of the actual quantity to convey was made using a table of reference exchange rates [39] maintained by the company, reflecting current actual exchange rates published by exchange providers. E-gold was unique at the time in that they created the "e-gold Special Purpose Trust" which held title to the physical bullion on behalf of the users.

This transparency enabled many observations to be made about how e-gold was being used. E-gold's early success may have contributed to its demise. E-gold's store of value and large user base made it an early target of financial malware and phishing scams by increasingly organized criminal syndicates. The first known phishing attack against a financial institution was made against members of the e-gold mailing list in June Failing to prospectively verify the identity of account holders, e-gold began to suffer from an increasing rate of criminal activity mainly perpetrated by Russian [ citation needed ] and Ukrainian [ citation needed ] hackers against its users.

In addition to phishing, the attackers made widespread use of flaws in the Microsoft Windows operating systems and Internet Explorer web browser to collect account details from millions of computers to compromise e-gold accounts.

Jackson's theory was that e-gold is a book entry system with account histories, making it simple to conduct an investigation to track down and identify users who had engaged in illicit activity after the fact. However, account and transaction records—even failed log-in attempts—were permanently recorded, enabling linkage of seemingly unrelated accounts secretly under unified control.

The data mining this enabled, combined with inputs from independent exchange services, enabled law enforcement to identify numerous criminal users of the service. Various fraud artists from Western countries were also able to take advantage of the e-gold system as a means of funding their schemes, enabling for the first time in history, international Ponzi schemes. Perpetrators of auction fraud on eBay would sell fake or non-existent items on the site.

These criminal syndicates preferred their victims to pay in e-gold because it was the fastest and easiest way for them to move the funds overseas. The increase of online crime linked to e-gold led to complaints to government authorities by defrauded account holders, who often did not understand the difference between e-gold and the fraudulent person or company that encouraged them to open an e-gold account and wire money to fund it. As an online transactions system with exchange agents worldwide, e-gold enabled criminals and hackers in Romania to move money quickly and easily from victims in America back to the country from which the attacks were originating.

E-gold was unknowingly part of a larger systemic problem with the banking system. The banking and credit system in the United States were not designed for a digital environment, and were therefore fundamentally insecure and highly vulnerable to identity theft and check fraud , as well as trust based attacks such as phishing. The willingness of credit card companies to allow people to apply for a card without being identified in person enabled rapid growth of identity theft.

There were early reports where e-gold had actively helped to catch and collar cyber criminals, such as the one who stole Cisco Systems ' firewall code and offered it for sale to be paid in e-gold.

The USA Patriot Act , passed in the wake of the September 11 attacks more than five years after e-gold had been launched, made it a federal crime to operate a money transmitter business without a state money transmitter license in any state that required such a license. At the time a money transmitter was in most states defined as a business that cashed checks or accepted cash remittances to send from one person to another person across international borders, such as Western Union or MoneyGram.

For example, prior to , California regulated money transmitters under the "Transmission of Money Abroad Law". However, in its actions from , the U. Treasury Department in conjunction with the United States Department of Justice stretched the definition of money transmitter in the USA Patriot Act to include any system that allows transfer of any kind of value from one person to another, not merely national currency or cash.

Using this new interpretation they then proceeded to prosecute the USA-based gold systems, e-gold and later e-Bullion under the USA Patriot Act for not having money transmitter licenses, even though these companies had previously been cooperating with regulatory authorities and told they did not fall under the definition of money transmitter.

The charge of not having a money transmitter license was eventually dropped against e-bullion. A November article in Financial Times noted that "For several years, Mr Jackson had hoped to resurrect e-gold himself, but it became clear he would not be able to obtain the money transmitter licenses required in most US states.

Banks suffer from the same problems with criminal activity, phishing, ponzi schemes and money laundering on a much larger scale, and some of the biggest banks have even knowingly participated in money laundering. While e-gold had begun implementing stronger controls against abuse by users of the system by , and was actively combating the use of its system for child pornography as a founding member of the Financial Coalition Against Child Pornography , [59] the Justice Department indicted the e-gold directors on four counts of violating money laundering regulations and knowingly allowing a transaction to purchase child pornography.

E-gold is the most prominent digital currency out there. It has the attention of the entire digital currency world. That world is a bit of a wild west right now. People are looking for what are the rules and what are the consequences.

The court ruled against e-gold, stating that "a business can clearly engage in money transmitting without limiting its transactions to cash or currency and would commit a crime if it did so without being licensed. After vigorously contesting the charges for a year, in July the company and its three directors entered into a plea agreement. Jackson pleaded guilty to "operation of an unlicensed money transmitting business" and "conspiracy to engage in money laundering".

Concurrently, the companies agreed to a consent order of forfeiture, dropping their action to recover funds previously seized by the government. Sentencing was scheduled to occur days following entry of the Plea Agreements in order to afford a day interval to implement compliance requirements.

A status report detailing progress with regard to mandated compliance measures was filed November 8, Jackson has suffered, will continue to suffer, and may never be successful with e-Gold". The e-gold indictment was accompanied by seizures and forced redemption of the e-gold balances of multiple exchange providers, resulting in an almost overnight decline in the amount of e-gold in circulation and gold reserves from 3.

The primary purpose of the PIRO was to prevent dispersion of assets the gold reserves which the government had been unable to seize due to the custodial arrangements whereby the e-gold Bullion Reserve Special Purpose Trust held title to the gold. The combination of adverse publicity and disrupted exchange markets led to a precipitous decline in e-gold usage and demand. Whereas under normal circumstances a decrease in demand would have resulted in a decrease in circulation without impacting exchange rates , this combination led to e-gold Users being unable to exchange their e-gold for conventional money and discouraged any potential recipient from accepting payment in e-gold.

In , the Plea Agreement detailed requirements for e-gold to resume operation as a regulated financial institution. While e-gold had already complied with the majority of requirements by the time of sentencing, it was discovered that the guilty Plea itself effectively precluded the companies or any company controlled by the e-gold directors from being licenseable in any US state.

In accordance with the Plea, e-gold suspended all remaining Spend activity, in effect locking up all e-gold account balances. The challenge was then how to restore customer access to the value in their e-gold accounts. Lacking licenses as a money transmitting business, any plan to liquidate the system and distribute value to customers would risk being construed as an additional violation of operating without required licenses. In , the e-gold directors approached the US government with a proposal whereby the government might serve as middleman for disbursing the value due to e-gold customers.

Following a year of negotiation, the e-gold VAP was approved calling for monetization of reserves and a claims mechanism, under the authority and oversight of Judge Hollander.

Some of the e-metal in e-Gold accounts was criminally derived, but much of the e-metal was owned by innocent account holders. A three-month window was set from June 3, to October 1, for e-gold account holders to submit a claim on their funds, then extended to December 31, After the e-gold and e-Bullion cases, California [54] and several other states amended their regulations to follow the federal precedent to define all digital value transfer systems as money transmitters.

However, California's law is worded as to define a range of Internet startup companies, such as the room booking service Airbnb , as "money transmitters". E-gold was an early pioneer of Internet payments. The company was the first successful online payment system which pioneered many of the systems and techniques of e-commerce, including making payments over an SSL encrypted connection, and offering an API to enable other websites to build services using e-gold's transaction system.

Though e-gold was ultimately shut down by the US government, the federal judge on the case ruled that the founders of e-gold "had no intent to commit illegal activity. E-gold's failure was ultimately due to their inability to provide a system of reliable user identification and the failure to provide a workable dispute resolution system to identify and cut off illegal and abusive activity in their user community.

Other transaction systems such as Webmoney. While PayPal has done a better job of addressing abuse than e-gold did, they now contend with the same kind of Internet fraud that took down e-gold.

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