e-gold Update: Throughput Limits

Since my last post of October 19 announcing deployment of e-gold's document upload interface, numerous e-gold Users have uploaded the required documents for verifying identity and residential address. So far, however, many of you will have noticed that your accounts continue to display the message:

"Account Status: Spend Access Restricted"

and that no Spend transactions have occurred system-wide during the entire interval since that software release. There are several reasons for the delay, and each of them in turn introduces new complexities I will elaborate. The good news, jumping ahead, is that we anticipate re-opening for Spend activity, on a limited basis, within a day or two.

State licensing requirements

e-gold has approached every US state, and the District of Columbia, with either a license application or a letter requesting a determination as to whether a license is required in that state. Several states have indicated that e-gold should prevent customers from their state from using the system until a determination is made or a license granted. This meant that we had to implement programmatic modifications to selectively restrict access to Spend capabilities on a state-by-state basis. That part is done and deployed but the additional development task introduced some delay.

AML controls based on geographic (country) risk
In the past, there was a geographic pattern to criminal abuse of the e-gold system with Users from particular countries showing a much higher statistical tendency to engage in such activities. We have decided to limit this geographic risk by the temporary, and somewhat crude, means of country-specific throughput limits. Throughput limits themselves are not crude, and in fact will evolve into a cornerstone of the more refined Customer Due Diligence and risk-based Transaction Monitoring capabilities e-gold is urgently continuing to develop. The crudeness lies in their application, again temporarily, to entire countries. You will note http://www.e-gold.com/.. that several countries have a zero throughput limit, that is, a complete prohibition of receiving or making Spends. We regret this and are working on the system enhancements that will enable us to reinstate usage privileges. Meanwhile, e-gold Users from these locations are encouraged to go ahead and provision their accounts, and watch for the system improvements that will support restoration of service.

Non-documentary verification

US laws and regulations governing financial institutions call for Customer Identification Programs that may involve documentary and/or non-documentary means of verification. "Documentary" means, well, looking at documents. Document upload and review is now a universal requirement for e-gold Users.

"Non-documentary" means checking individual identifiers for internal consistency - name, address, date of birth, government issued identifying number - against an external database. Initially, we were planning to use a vendor for this element of identity verification for US Users of e-gold. The vendors that provide such verification services obviously must themselves perform rigorous due diligence on their customers. Currently, e-gold is still working through that process with the vendor it hopes to use. If we had this capability for US Users of e-gold we could afford them a higher level of transaction privileges, i.e., a higher monthly throughput limit. Until we have that in place though, we are limiting US Users to the same throughput limits as Users from other OECD countries.

We plan to also implement Postal Validation as soon as possible. That enhancement to Customer Identification will support higher throughput limits for postally validated accounts, hopefully including accounts in the higher risk countries.

Disruption of exchange

A yet unsolved problem is resumption of liquid and competitive exchange markets. I will be posting additional thoughts on that topic shortly. To briefly preview, e-gold will be promulgating requirements for the regulation of exchange services, which will include a combination of government licensing requirements plus e-gold's own Enhanced Due Diligence for exchangers.

e-gold Allowable Spend Throughput.

Country of Residence for e-gold Account: United States
Allowed Spend Throughput: 3000 USD equiv. incoming, 3000 USD equiv. outgoing per 30 days

Country of Residence for e-gold Account: Australia, Austria, Belgium, Canada, Czech Republic, Denmark, Finland, France, Germany, Greece, Hungary, Iceland, Ireland, Italy, Japan, Luxembourg, Mexico, Netherlands, New Zealand, Norway, Poland, Portugal, S. Korea, Slovakia, Spain, Sweden, Switzerland, Turkey, United Kingdom 3000 USD equiv. incoming,
Allowed Spend Throughput: 3000 USD equiv. outgoing per 30 days

Country of Residence for e-gold Account: Algeria, American Samoa, Andorra, Angola, Anguilla, Antigua and Barbuda, Argentina, Armenia, Azerbaijan, Bahamas, The, Bahrain, Bangladesh, Barbados, Belize, Benin, Bermuda, Bhutan, Bolivia, Bosnia and Herzegovina, Botswana, Brazil, British Virgin Islands, Brunei, Burkina Faso, Burundi, Cambodia, Cameroon, Cape Verde, Cayman Islands, Chad, Chile, China, People's Republic of, Christmas Island, Cocos (Keeling) Islands, Colombia, Comoros, Congo, Democratic Republic of the, Cook Islands, Costa Rica, Croatia, Cyprus, Djibouti, Dominica, Dominican Republic, Ecuador, Egypt, El Salvador, Equatorial Guinea, Eritrea, Estonia, Ethiopia, Falkland Islands (Islas Malvinas), Faroe Islands, Fiji, French Guiana, French Polynesia, French Southern and Antarctic Lands, Gabon, Gambia, The, Georgia, Ghana, Gibraltar, Greenland, Grenada, Guadeloupe, Guam, Guatemala, Guernsey, Guinea, Guinea-Bissau, Guyana, Haiti, Honduras, Hong Kong, India, Indonesia, Iraq, Isle of Man, Israel, Jamaica, Jersey, Jordan, Kazakhstan, Kenya, Kiribati, Kosovo, Kuwait, Kyrgyzstan, Laos, Lebanon, Lesotho, Libya, Liechtenstein, Lithuania, Macau, Macedonia, Madagascar, Malawi, Malaysia, Maldives, Mali, Malta, Marshall Islands, Martinique, Mauritania, Mauritius, Mayotte, Micronesia, Moldova, Monaco, Mongolia, Montenegro, Montserrat, Morocco, Mozambique, Namibia, Nauru, Nepal, Netherlands Antilles, New Caledonia, Nicaragua, Niger, Niue, Norfolk Island, Northern Mariana Islands, Oman, Pakistan, Palau, Palestinian Territories, Panama, Papua New Guinea, Paraguay, Peru, Philippines, Pitcairn Islands, Puerto Rico, Qatar, Reunion, Rwanda, Saint Helena, Saint Kitts and Nevis, Saint Lucia, Saint Pierre and Miquelon, Saint Vincent and the Grenadines, Samoa, San Marino, Sao Tome and Principe, Saudi Arabia, Senegal, Serbia, Seychelles, Sierra Leone, Singapore, Slovenia, Solomon Islands, Somalia, South Africa, Sri Lanka, Suriname, Svalbard, Swaziland, Syria, Taiwan, Tajikistan, Tanzania, Thailand, Timor-Leste (East Timor), Togo, Tonga, Trinidad and Tobago, Tristan da Cunha, Tunisia, Turkmenistan, Turks and Caicos Islands, Tuvalu, U.S. Virgin Islands, Uganda, United Arab Emirates, Uruguay, Uzbekistan, Vanuatu, Vatican City, Venezuela, Wallis and Futuna, Western Sahara, Yemen, Zambia 1000 USD equiv. incoming,
Allowed Spend Throughput: 1000 USD equiv. outgoing per 30 days

Country of Residence for e-gold Account: Afghanistan, Albania, Belarus, Bulgaria, Central African Republic, Congo, Republic of the, Cote d'Ivoire (Ivory Coast), Latvia, Liberia, Myanmar (Burma), Nigeria, Romania, Russia, Sudan, Ukraine, Viet Nam, Zimbabwe 0 USD equiv. incoming,
Allowed Spend Throughput: 0 USD equiv. outgoing per 30 days

Country of Residence for e-gold Account: Cuba, Iran, N. Korea
Allowed Spend Throughput: No service