Ottawa warns on gold-backed Web trades

[dbarberic]

iTulip is often fond of following the trial balloons floated by governments to attempt to identify which way the wind is blowing.

I would consider this a trial balloon that Canada is floating to set the stage to legislate against internet gold programs (aka Goldmoney, etc.)

http://globeinvestor.com/servlet/sto...rac26/GIStory/

Ottawa warns on gold-backed Web trades
FINTRAC sees potential abuse of electronic transactions tied to gold and silver
KEVIN CARMICHAEL

Monday, May 26, 2008
OTTAWA — Canada's financial intelligence agency warns that criminals may be exploiting Internet-based companies that convert cash into electronic gold, exposing a new front in the international effort to restrict terrorist financing and money laundering.

While other channels of money laundering are successfully being shut down, authorities are increasingly worried about a proliferation of "digital precious metals operators" websites that offer clients a chance to conduct Internet business in units backed by gold and silver rather than paper currencies.

The Financial Transactions and Reports Analysis Centre of Canada, or FINTRAC, says in a report these websites have "achieved critical mass on the Web" and are facilitating millions of transactions on the fringe of the international financial system - the equivalent of a Wild West where legitimate businesses, privacy-seeking individuals and criminals can mingle just out of reach of the law.

At stake is the effectiveness of the financial reporting rules that countries such as the United States, Britain and Canada enacted in response to the Sept. 11, 2001, terrorist attacks. A network that allows individuals to move money around the world means criminals can avoid commercial banks and other financial institutions required to turn over their records to the government.

"As financial institutions and non-financial businesses increasingly deter money laundering and terrorism financing, adaptable and technology-savvy criminals and terrorist financiers will likely see other unregulated, exploitable avenues to further their nefarious purposes," concludes the report, which was made available under the Access to Information Act.

"Digital precious metals may become one of them."

I used to be a big Goldmoney.com buyer, but pulled my money around 9-12 months ago when they had to eliminate electronic transfers to and from US bank accounts. If I money sitting in a Goldmoney account or similar type of instution, I'd be very concerned reading this.

I think we are seeing the set up for a government clamp down on these methods of getting out of paper currency.

[GRG55]

Re: Ottawa warns on gold-backed Web trades

iTulip is often fond of following the trial balloons floated by governments to attempt to identify which way the wind is blowing.

I would consider this a trial balloon that Canada is floating to set the stage to legislate against internet gold programs (aka Goldmoney, etc.)

http://globeinvestor.com/servlet/sto...rac26/GIStory/



I used to be a big Goldmoney.com buyer, but pulled my money around 9-12 months ago when they had to eliminate electronic transfers to and from US bank accounts. If I money sitting in a Goldmoney account or similar type of instution, I'd be very concerned reading this.

I think we are seeing the set up for a government clamp down on these methods of getting out of paper currency.

I think the Canadian govt is largely unconcerned about the precious metal/paper money aspect of this, and mighty concerned about the potential for Canadians to easily evade income and capital gains taxes.

Same end result though.

[metalman]

Re: Ottawa warns on gold-backed Web trades

I think the Canadian govt is largely unconcerned about the precious metal/paper money aspect of this, and mighty concerned about the potential for Canadians to easily evade income and capital gains taxes.

Same end result though.

sad state of affairs for libertarians. create a free market using gold accounts and what do you get? a bunch of criminals buying and selling drugs and god knows what. plus otherwise honest citizens avoiding taxes. oh, and a few plain old honest citizens. who knows the proportion of each category.

[Spartacus]

Re: Ottawa warns on gold-backed Web trades

alleged criminals

allegedly buying gold

Allegedly illegally

for allegedly illegal purposes.

They admit they have not one case of proven criminality.

Not one specific person has been imprisoned or apparently even questioned for even one instance of "gold terrorism"

It's getting seriously eff'd up, in a decidedly pear shaped way

I am seriously considering moving to India or Brazil, not just because of this threat but many, many other government encroachments on my liberty.

sad state of affairs for libertarians. create a free market using gold accounts and what do you get? a bunch of criminals buying and selling drugs and god knows what. plus otherwise honest citizens avoiding taxes. oh, and a few plain old honest citizens. who knows the proportion of each category.

[krakknisse]

Re: Ottawa warns on gold-backed Web trades

I second the assessment - definitely a "trial balloon".

1. E-gold was indicted.
2. FINCEN is onto electronic gold: FATF REPORT HIGHLIGHTS MONEY LAUNDERING TRENDS
3. 2003 National Money Laundering Strategy mentions GoldMoney, eGold.
4. National Institute of Justice: Informal Value Transfer Systems, Terrorism and Money Laundering (p.27)

Similar and often more complicated alternatives involve internet companies offering payments and money transfer services from within the US or from overseas, including some based in secrecy or laxly regulated jurisdictions. Others facilitate payments and value transfers on the basis of gold deposits held in London, Zurich or Dubai. Such companies include names like Paypal, eBay Payments, also known as Billpoint, Yahoo! PayDirect, c2it offered by Citigroup, email payment services offered by the U.S. Postal Service through CheckFree; MoneyZap and BidPay, Evocash, E-gold, Osgold, NetPay, GoldMoney, Standard Reserve, icegold. In addition, X-Card, Cash Cards, and e-Bullion provide alternative ATM cards, issued by offshore banks with access to most ATM machines, obtainable by any individual with an electronic currency account.

[c1ue]

Re: Ottawa warns on gold-backed Web trades

Folks,

I've said many times now that gold bugs are ignoring possible government intervention.

This 'War on Terror' angle is ideal from the control standpoint; every libertarian argument can be countered by terrorist money laundering charges.

The allegations about tax evasion, money laundering, etc are also very possibly true; the whole point of cash whether $100 bills or gold bullion is that once in hand, there are myriad ways to keep it off the system's radar.

For that matter, someone who was putting 25% of their saving in gold for the past 15 years, buying over the counter in a shop, then burying it in their backyard - would have a completely untraceable hoard for buying or inheritance purposes.

The only safe way: get out of the dollar and US assets.