Alan"s Money Blog

May 11, 2007

US Government Forces E-gold Redemptions - Seizes Gold this.

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In an unprecedented move on or just before Wednesday May 9th, 2007, the United States of America has forced Omnipay et al E-gold to redeem all the gold backing the 58 previously frozen accounts owned by e-gold, 1mdc, icegold and a handful of other exchangers and customers to be liquidated effective immediately to a us dollar account owned by the federal government.

According to the reduction in the gold bar list, the bar count
has dropped by 48 bars of approximately 400 oz each between May 3, and May 9.

This redemption totals USD $11.357 Million.

Date Gold Grams ($ Value)
03-05-07 3,489,436 77.015 Million
09-05-07 2,974,871 65.668 Milllion

Gold Bars value Sold: USD 11.357 Million

MoneyNetNews has learned from a reliable source that e-gold has been ordered
to hand over a fresh copy of the customer database when the redemption
is completed.

MoneyNetNews cannot confirm if all of the 48 bars redeemed account for
the forfeiture action of the United States. It is possible that a part
of this activity can be accounted for by increased volatility in e-gold's
general market.

Not only was E-gold / Omnipay ordered to convert gold (and silver) holdings
in the seized accounts into US Dollars, but that included their own
(Omnipay's, and E-gold's) frozen (seized) accounts. This will ultimately
result is great losses of value over time even if the victims of the seizures
are found to be innocent due to the in progress bull market in gold and bear
market in US Dollars.

The seizure order appears to be unrelated to the criminal case in progress
against E-gold and OmniPay in that the seizure of the accounts by the government
was done under a (separate) civil case, for which the Government has yet to file

By doing so, the government was able to seize accounts without having
to reveal anything to the owners of the accounts themselves. By law,
the government has 30, and possibly up to 90 days to file a complaint.

Until the government civil filing is done, none of the victims of the seizures
can possibly do anything to defend themselves, not even obtain information as
to why their accounts have been seized, or what they would have done wrong.

None of the victims of the account seizures have been advised of anything
officially at this time."

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