Electronic Currency Company is Subject to the Bank Secrecy Act, Federal Judge Rules

By Matt Squire

A recent U.S. federal court ruling that an electronic currency company qualifies as a money service business and is subject to the Bank Secrecy Act could expand the due diligence responsibilities of banks that work with similar businesses. Federal prosecutors say E-Gold Ltd., a Nevis, West Indies-based organization that sells electronic currency backed by gold bullion, knowingly allowed criminals engaged in child pornography and operating a money laundering ring to use its accounts. The company was charged in April 2007 with conspiracy and operating as an unlicensed money services business. The company claimed that it was not required to monitor...