A History of Digital Currency in the United States

Abstract

This book presents detailed case studies of the first commercial internet digital currency systems developed between 1996 and 2004. Transactions completed with the new technology circumvented all US financial regulations, an opening that transnational criminals exploited. Mullan explains how an entire industry of companies, agents, and participants turned a blind eye to crimes being committed in this unsupervised environment. He then tracks the subsequent changes made to US regulations that now prevent such unlicensed activity, illustrating the importance of supervising products and industries that arise from new disruptive technology. This book distills hundreds of hours of interviews with the creators and operators of early digital currency businesses to create detailed case studies of their practices. List of Charts ; Chapter 1: Introduction; Who Uses Digital Currency and Why?; What Is Digital Currency?; New US Financial Regulations; Legal Cases; Building a Better Mousetrap; A Lack of Early Digital Currency Regulation; Notes; Chapter 2: E-gold; Why e-gold?; One Hundred Percent Reserves at All Times; Grams, Troy Ounces, and Kilos; Financial Risk; E-gold Versus Bank Payments; The Ponzi Tsunami; Ponzi Payments; The Elephant in the Room; Iranian Accounts; E-gold Asset Seizures; 18 U.S.C. 1961-1968 (RICO); 981-Civil Forfeiture; OmniPay; The Judge's Opinion. Guilty Plea and Consent Order of ForfeitureNotes; Chapter 3: The Liberty Dollar and Bernard von NotHaus; NORFED; American Liberty Currency Circa 2000; Bernard von NotHaus; Recognized Issues; Issue 1; Issue 2; Issue 3; 100 Percent Gold and Silver; Digital Liberty Dollars; eLibertyDollar Consumer Transactions; Federal Bureau of Investigation Raid and Seizure; The Liberty Dollar Case; 2015 Sentencing; Notes; Chapter 4: E-Bullion and Mr. James Fayed; E-Bullion Advantages; James Michael Fayed; E-Bullion History; Competition; Innovation; E-Bullion's Competition. Computer Operation, Servers, and SecurityExchange Agents; Background; Why Accept E-Bullion?; Fraud Prevention; HYIP Ponzi Scams and E-Bullion; AdSurfDaily (110 Million); Legisi (72 Million); FEDI HYIP Ponzi Scheme (2003) Multimillion; Gold Quest International (28 Million); Pathway to Prosperity (70 Million); Profitable Sunrise (Estimated in the Tens of Millions of Dollars); Liquidity in the E-Bullion Marketplace; Murder of Pamela Fayed; Remission; Notes; Chapter 5: Crowne Gold; Terry Neal; Crowne Gold; 7 Million Hack; Finanzas Forex/Evolution Marketing Group (EMG). Affidavit of Brian DiPernaForfeiture; Notes; Chapter 6: Liberty Reserve; Background on Liberty Reserve; 2006 Goldage Indictment; The Liberty Reserve S.A. Indictment and Case; Notes; Chapter 7: IntGold; Notes; Chapter 8: OSGold; StormPay Example; A Time of Acceptance; Off-Shore Gold and OSOpps; Exchange Service; The Shills; The Scam; The Foreign Banks; Debit Cards; The Complaints; Notes; Chapter 9: GoldMoney; Building a Better Mousetrap?; Created by Bankers; Cambios; Why All the Patents?; Belief Versus Reality; Notes; Chapter 10: WebMoney Transfer; WMID; WebMoney Passports; Formal Passport. Personal PassportBitcoin; WebMoney Transfer; Keeper Standard (Mini); Keeper Mobile; Keeper WebPro (Light); Notes; Chapter 11: New FinCEN Rules; Prepaid Access; The MSB Rule; Definition of MSB; Foreign-Located MSBs; Activity Threshold; Penalties; Money Transmitter; Suspicious Activity Reporting; Notes; Index.