e-Bullion

» see e-bullion.com as it lived, on the wayback machine

~ the obituary ~

I came to this one backwards. The phrase digital gold currency reached me through the bitcoin arguments of the early 2010s, and by then e-Bullion had been seized for years and existed only as a cautionary paragraph somebody would post when the conversation got too optimistic. I never had an account. Nobody I knew in Turkey did, and the whole category was Californian in a very particular way.

The product itself was straightforward and, for its time, well built. Jim and Pamela Fayed incorporated it in 2000 and launched on 4 July 2001, out of a coin dealership called Goldfinger Coin & Bullion in Moorpark, California, with the corporate entity registered in Panama. You bought a balance denominated in gold or silver. You could send it to anybody else with an account, instantly, without a bank in the middle. Physical metal sat behind it in Los Angeles and at the Perth Mint in Australia.

It was ahead of its peers on the boring parts. e-Bullion was the first digital gold currency to issue a debit card, so a balance in grams could come out of a cash machine, and it handed out CRYPTOCard hardware tokens for account security at a time when most financial sites were still asking for your mother's maiden name. By 2008 it had passed a million accounts.

~ the case file ~

~ the business it was actually in ~

Digital gold occupied a legal position that everyone involved understood and nobody wanted to test. It moved value between people without being licensed as a money transmitter, which is the same crack e-gold was already sitting in and getting prosecuted for. Some of the volume was people who genuinely wanted metal exposure without a broker. A lot of it was payment traffic that could not use a bank.

That was the case the government was assembling when everything else happened. The charge, when it came, was conducting an unlicensed money transmitting business.

~ the actual end ~

On 28 July 2008 Pamela Fayed was stabbed to death in a parking garage in Century City, Los Angeles. She and Jim were in the middle of a divorce and fighting over control of the company. Jim Fayed was arrested by federal agents on 4 August on the money transmitting charges. The e-Bullion website went down on 5 August. He was later convicted of capital murder for arranging her killing and is on death row in California.

Everything the company held was seized. A million account holders found out their balances were now evidence, and the recovery has been running through the courts ever since: roughly $24 million recovered, with disbursements to victims in 2014, 2015 and one more round in 2019 that returned $9.8 million to over a thousand people. Eleven years to give back part of what was in the vault.

~ the next chapter ~

The digital gold experiment ended with e-gold's prosecution and this. Both proved the same thing in different registers: a value transfer system with a company at the center has a single point somebody can seize, and it does not matter how much metal is in the vault or how good the hardware tokens are.

Bitcoin's whitepaper appeared three months after e-Bullion went dark. The people who wrote about it in 2009 had watched exactly this happen, which is a large part of why the design has no office to raid.

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