A significant blow to anonymity - E-Gold indicted!

E-Gold is an online bank which allows customers to anonymously deposit money into an account and transfer it electronically to other accounts on financial networks around the world, very much like Swiss or South American banks allow you to do if you've got enough money. The thing about E-Gold is that you don't have to be as rich as a James Bond villain to open an account, you only need a small amount of money to open one of their numbered accounts. For the past couple of years, however, the United States government has been investigating them, and brought the founders up on charges of violating anti-money laundering laws. Some pretty unsavory folks, like identity thieves and drug dealers, they say, have been caught using E-Gold to store and launder money related to their transactions, and so the people who run the company are in trouble for it. To make sure that the prosecutors stir up the maximum amount of outrage from the people so that their reputation they also paged one of the Four Horsement of the Infocalypse, Child Pornography.

There is no word yet if the US government will go after PayPal, Western Union, or the countries of Switzerland, Bolivia, or Argentina next. Cash is still readily available in this country, though I don't expect it to last another fifty years.

Even though you can't trust all of the information in this Wikipedia article (it's Wikipedia, after all), it's got a good overview of how anonymous electronic currencies in general and E-Gold in particular work.