I don't think people grasp how easy and widely e-gold was used to launder money. It was THE premier way to move money if you were involved with any sort of electronic fraud.
All you had to do was cash-out someone's bank account then wire the money to an e-gold affiliate, who deposits it into your online account. All transactions are irreversible. e-gold kept minimal records and after the money enters an offshore account, the government has little chance of recovery.
There were millions of dollars being moved through e-gold with fraud. They purposely made the process easy with as little verification as needed. Their market was criminals. I'm sure most of their profit came out of transaction fees related to fraud.
Where's the innovation? Their site looks like shit. They just managed to find a loophole to look legitimate and survive this long. I'm not surprised that the owners plead guilty to conspiracy to engage in money laundering.