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FBI Raids: Pertinent or Paranoid ?? !


FBI Raids: Pertinent or Paranoid?

The pace of business is consistently swifter than that of government...
Lawmakers often spend a significant amount of their time responding to advances in commerce and science. They frequently turn to their enforcement agencies to investigate and scrutinize any topic that they find difficult to comprehend.

FBI Raids: Pertinent or Paranoid ?? !
 FBI Raids: Pertinent or Paranoid ?? !

We are currently witnessing the implementation of this action on at least two electronic currency companies.
In December, the FBI conducted a search of the Texas-based head office of INT Gold without arresting anyone or providing any explanation for their actions except that they were investigating a possible fraud. More than a month has passed without any significant developments in the case.

Around the same time, e-Gold was issued a search warrant.


The reason provided was trivial as they were supposedly lacking a mandatory license for currency exchange. They appeared to be quite displeased with this and expressed their frustration by making a statement on their website.
On January 20, 2006, e-gold® expressed a positive response towards the US Government's assessment of its identity as a form of currency that was privately administered.

From the middle of December 2005, e-gold's primary dealer and contractual operator, Gold & Silver Reserve Inc. (G&SR), underwent a warranted search of its premises and records, had its domestic bank accounts frozen, and was falsely targeted by a major business publication with a misleading attack at an opportune time.

FBI Raids: Pertinent or Paranoid ?? !
 FBI Raids: Pertinent or Paranoid ?? !

On January 13, 2006, an emergency court hearing in the US District Court led to the removal of the freeze order on G&SR's bank accounts. Although there were several criminal claims against G&SR in obtaining search and seizure warrants, the government failed to prove them. The only allegation that remained was that G&SR had operated as a currency exchange without a proper license. To resolve this issue, G&SR had suggested that e-gold be classified as a currency for regulatory purposes so that they could register as a currency exchange. However, in a Treasury report published on January 11, 2006, the Department of Treasury stuck to its interpretation of the USC and CFR definitions of currency, which excluded e-gold.

For almost a year now, G&SR has been involved with a Treasury agency in an examination of their adherence to the Bank Secrecy Act, which they had initiated on their own. Although they would have preferred not to have to go to court, they are pleased to have the chance to further discuss with the government how to ensure proper legal recognition of e-gold, while also continuing to promote e-gold as a widely-used method of international trade.

Although e-gold and G&SR have been harmed by unwarranted accusations and negative publicity, G&SR has persevered by fulfilling its financial responsibilities and remaining up and running. e-gold is steadfast in its mission to provide a secure payment option to people from all financial backgrounds across the world, at a lower cost than any other system. Despite recent setbacks, e-gold anticipates overcoming these obstacles and experiencing continued growth.
E-Gold's proactive approach deserves recognition and INT Gold should have taken a similar action.

If the general public was aware of the frequency of search warrants that financial institutions receive for various reasons, they would likely share the same level of doubt as me regarding the media attention surrounding the government's actions against the two e-currency companies.

Let us examine how government bodies take action against big banks when they are suspected of misconduct. One noticeable feature is that any statements made by the investigating agencies are highly detailed and precise since major banks possess significant financial and political power to retaliate against less robust evidence.

The Citigroup private banking scandal in Tokyo in 2004 is a clear instance of a specifically recognized wrongdoing. According to Japanese officials, Citigroup assisted customers in altering accounting records via improper real estate deals and neglected to refund taxes for clients. Additionally, Citigroup mishandled confidential data belonging to their customers. 

Due to these infractions, Japanese authorities issued an order for Citigroup to shut down their private banking operations in Japan. However, these officials took steps to ensure that customers who were not impacted by the scandal could move their accounts with minimal disruption.

It is uncommon for depositors to suffer complete harm. The Colorado-based Silverado failure resulted in Charles Keating's imprisonment, an appropriate punishment for the countless people whose life savings were depleted. The incident is noteworthy because it occurred during a hands-off junk bond situation.

FBI Raids: Pertinent or Paranoid ?? !
 FBI Raids: Pertinent or Paranoid ?? !

Authorities only bring up raids when it is advantageous for them to do so.


This is sometimes because the searches and seizures do not uncover enough evidence to press charges. The world of modern finance can often be ambiguous, and when a situation is closely examined, it may seem that certain activities were borderline illegal but did not cross into unethical territory.

We do not yet know what is being investigated at INT Gold. Unlike the way major banks are treated, the authorities' announcement about this raid was vague, and this was likely intentional. The question is who they were trying to provoke. However, according to American law, the parties involved are innocent until proven guilty and should be given this right. We should not assume anything until we have all the facts. It's possible that, like with many unpublicized raids at major banks, the wrongdoing is not the fault of the company, but a client who misused their privileges at the company's facilities.

The e-currency investigations are likely caused, at least in part, by a government's uncertainty on how to oversee e-currencies that are not backed by a country's government and may not be located within that country's borders.

This brings to mind the beginnings of broadcasting, when authorities were unsure how to handle radio signals that could cross state lines without government authorization, as they were subject only to the laws of physics. Although it may seem absurd now, the idea of a technology surpassing political and geographical boundaries was a serious issue for them. It took almost 15 years for the US government to establish the Federal Communications Commission to manage such an "advanced" industry as interstate broadcasting.

Due to their private generation and administration, coupled with the lack of a centralized monitoring system for regulation, it is not surprising to see increased attention and regulation of e-currencies under current American laws. Until a satisfactory policy is established, authorities are taking a self-righteous approach in the name of consumer protection, often resorting to rationalizations and casting suspicion. Though this may not be entirely just, it has proven to be a successful tactic, as observed in related online discussions.
It is expected that the matter will be resolved more quickly than it was in the broadcast industry.


FBI raids are guaranteed to gain attention, but this may lead to ethical concerns if the purpose of the raid is to intimidate rather than solely to apprehend wrongdoers. This is a possibility that may be relevant in the case of raids on two e-currency companies.


INT Gold, e-gold, e-currency, e-commerce, FBI raids, Cyberiter