Interesting post on DigitalMoneyworld.com about e-gold and e-gold current action regarding HYIP and autosurf scam program. It is clear that the previous e-gold blocked account was about these kind of programs. Here is what had been posted on DigitalMoneyWorld.com

It now appears that Dr. Jackson and the team over at e-gold Ltd. are making some bold due diligence moves in order to stop their digital gold currency from being used by HYIPs, Ponzi scams and AutoSurf programs.

These preventative measure will certainly not create an easy road ahead for the e-gold administration and their previous ponzi customers and I can’t image the mountain of paperwork now being created, but e-gold’s new actions seem to be exiting the HYIPs and driving them away from e-gold.

Three cheers for e-gold!

The e-gold tool being used in this crack down is termed the ‘value limited account’. Also known as a ‘blocked account’, it is quickly becoming the Ponzi’s worst enemy.

What does it mean when your e-gold account gets a value limit? Here is what might show up in your email:

“Your account has been blocked under our Rights of Association clause in the account user agreement.”

e-gold Account User Agreement: 4.6. Right of Association - Issuer reserves the right to refuse service to particular individuals or entities, at its sole discretion, with or without cause.

Unless the problem is corrected, a value limited account is 100% useless for any future business. Blocked accounts cannot accept any incoming funds.

If you try to send a payment from a valid account to a blocked account and you will get a message just like this:

Incoming Spends Blocked on Recipient e-gold Account [receiver’s account]. A Block has been applied to e-gold Account XXXXXX. No payment can be made to this account while a block is in place. If you have any questions regarding this block, please direct them to your intended counterparty rather than to e-gold.com. Please note that this message does *not* imply that your account is blocked.

Are all the funds in this blocked account ’seized’, removed or unavailable?

NO. Blocked account holders can simply comply with e-gold’s due diligence request and unblock their legit account. Its a simple procedure and along those lines here is the next email message you will receive after your account is blocked.

In order for us to assist you with the block we will need due diligence documents. Please mail (or preferably, use a courier service such as Fed Ex or DHL) original notarized copies of all of the following information:

a) A signed and notarized affidavit listing: Name, address, and telephone number for the owner of e-gold account XXXXX
b) Copy of a telephone or utility bill that has the same address stated in item A.
c) Notarized copy of Passport or Driver’s license for the account owner.
Addressed to:
G&SR
175 East Nasa Blvd.
Suite 300
Melbourne, FL 32901
Attn: Due Diligence Unit
Please include a copy of all email correspondence on this matter with your due diligence documents. Thank You, e-gold Service

If the account is what I call a ‘legit user’, and the account holder has forwarded all the requested items, the block is then removed and your next email says something like this:

“We reviewed your account and the block has been removed…”

However, if the account is directly related to HYIP, AutoSurf or Ponzi scams, even after the user has presented valid ID information that account may still remain blocked and the account holder is effectively NOT invited back for any further business.

“…the blocks will not be lifted from your accounts under the Rights of Association clause in the account user agreement.”

It seems e-gold Ltd. might be clearly saying, “We don’t want that kind of business”.

Even with all of these blocked accounts it is important to remember that NO funds are being seized by e-gold. A ‘value limit’ does not mean your balance is lost.

With the value limit on the account and an association with an HYIP related business, most likely that account holder will be abandoning that account. E-gold will lose that user’s business, but IMHO its a very small price to pay for long term positive growth and success.

Not that my opinion matters much, but I’d like to commend the e-gold team for their bold actions and wish them the best of luck for their future success.

How are all those blocked users recovering the balances from their value limited accounts?

The “Workaround”

Why is it better to have an old e-gold account rather than a new one? Older e-gold accounts, will allow the account holder access to toggle a switch within the account admin area and allow the account to “accept spends from blocked accounts”. A new brand new e-gold account does not permit this action. Older accounts can ‘cash out’ the blocked funds by receiving the spend. Brand new accounts are not yet ’seasoned’ and will not accept blocked funds.

There are even people advertising this as a ‘paid service’ .

Hi there. I have an old e-gold account 894XXX and can help you to transfer money from blocked accounts. Fees for this service (transferred amount - %):
1. From $1 to $10 - 10%
2. From $11 to $50 - 7%
3. From $51 to $100 - 5%
3. From $101 to $500 - 3%
3. From $501 and more - 2%

Blocked users recovering their funds are now leaving e-gold and moving to alternative currencies such as Liberty Reserve or V-money. Both of these currencies seem to be not only allowing ‘investments’ but catering directly to the HYIP gaming business. Its also worth noting that neither of these digital currencies has AT&T servers located in the US like e-gold. These are non-US operations and welcomed by the industry.

Do you think bold changes like this will ensure a healthy and happy future for e-gold?

Is This Proactive Move By e-gold Having The Desired Effect?

Yes! ‘Investment web site’ operators and promoters are moving OUT of e-gold and into other offshore digital currencies.

Look around and you will find dozens of posts like these from the HYIP promotional webs, known as monitors. These two posts are from the Talkgold forums:

• “…I can’t operate as a monitor - can’t receive payouts or make reinvestments because of that block. May be it is time for all to stop use Egold and find another stable processor!”
• “How do I run a monitor site if account is blocked. I can’t make payment and get payouts from anyone”

All of these also from the Talkgold forums - “…tg is one of the top hyip forums in this arena.”

• “…its time to use a good alternate! what do you think about c-gold?”*talkgold
• “…Maybe all HYIPs should start using Pecunix or any other stable service?” *talkgold
• “…what do you think about Alertpay!” *talkgold
• “…It’s time for HYIP-admins to adapt their scripts and replace e-gold to other more reliable currencies. I can live without e-gold, e-gold can’t live without us.” *talkgold
• “I think we must use another e-currency”*talkgold - This comment from HYIPs.ir touted as the “Greatest HYIP monitor in Middle east with 14 language”
• “Looks like another e-currency will have to emerge.” *Comment by the Talkgold administrator

After reading the Talkgold forums, I’m reminded of how cockroaches run for cover at night when the kitchen light comes on!

On other blogs and popular emails lists like the Gold, Silver, Crypto Discussion Group, some users are making the claim to move away from e-gold during this current period until their legal trouble is resolved. Here are two examples:

“On the other hand, maybe it would be prudent to switch to systems like Pecunix, Liberty Reserve, or c-gold until the “investigation” by the government is concluded, one way or another.” *news.gmane.org To subscribe send a blank email to: gold-silver-crypto-subscribe @ rayservers.com

“I’m not a lawyer, but I don’t think it would be wise to send due diligence documents to a company that is under indictment for money laundering charges, especially a copy of a passport or driver’s license….Of course, I relocated some of my E-Gold into Pecunix and Liberty Reserve as well.” *code4gold.com

What happens to a legitimate user when his account is blocked by the e-gold script? Can they get the block be removed? YES, of course.

Here is a detailed account from the e-gold list, 9/18/07: To subscribe visit Kobly.com

[account holder]On Friday a customer informed me that he couldn’t complete a hosting order because my e-gold account had a Value Limit on it, I checked and there it was, my e-gold account had some kind of limitation, I immediately used the contact form on e-gold site and asked, how my account was limited and what could I do to lift this limitation. Since then I have been waiting for e-gold to contact me, this as not happened! My e-gold account is not from yesterday, I think I have that account since 2003 or 2004…What I’m I supposed to do, so I can unblock my account?

UPDATE:

I just received an email from e-gold:

We reviewed your account and the block has been removed. We apologize for any inconveniences this may have caused you. Thank You, e-gold Service

That was nice. For a long time, e-gold as helped to provided my family and me with a nice income, so I just say I’m happy to have received this email. Thanks E-Gold, best of luck.

This item[above] was posted by the operator of Hosting Marketers a legitimate US based web hosting company founded in November 1999.

Another legit user which after two separate requests into e-gold, had his account unblocked: *talkgold

Good news… I have sent support tickets to them and this is their reply :

We reviewed your account and have removed the block.

Thank You,
Due Diligence Unit

Other HYIPs or directly related HYIP promotional businesses now with blocked accounts are receiving detailed inquiries for due diligence information. Below is the operator of an HYIP promotional web site, with one account already blocked he questions if he can just open another, — “r8hyip.com Your honest hyip monitor“.

(Q to e-gold) Does that mean that i don’t have the right to open a new e-gold acc and continue my business?

(Answer) Please explain the exact nature of your business.

Thank You,
Due Diligence Unit

Finally, here is a worst case situation mentioned on Talkgold (home of the HYIP discussion) This entry comes from the operator of Money Monitor which touts it’s web site as “Hyip monitor and autosurf monitor - your investment guide.”

E-gold refuse unblock my account

I have sent all ID documents that e-gold has requested, because I have nothing to hide and I can explain every transaction on my e-gold account, but after 4 weeks I got reply:

We have reviewed the documentations you provided to our office but after evaluating the e-gold account and the documents you provided we decided the blocks will not be lifted from your accounts under the Rights of Association clause in the account user agreement.

They treated me like a dirt and thief, I have get back my money and have exchanged all funds to LR. If you need help from trusted person with getting money from your blocked e-gold account, contact with me and I will help you with a small fee.