In a press release today Neteller announced that funds in transit by US players had been seized by the US Attorney's office. This had been a rumor for several weeks, as transfers were held up and peer-to-peer transfers for US customers were cancelled. Thanks to Bill Rini for the heads-up.

On 19 January 2007, at the request of the Group, the Group's legal advisers met with representatives of the United States Attorney's Office for the Southern District of New York ("USAO") to clarify the Group's position with respect to the complaints brought on 16 January 2007 against two of the Group's founders, Mr. Stephen Lawrence and Mr. John Lefebvre. Neither are current employees or directors of NETELLER. In that meeting, the Group pledged to cooperate with the USAO, indicated it was prepared to begin document production promptly and discussed a potential mechanism for arranging an orderly repayment of funds to US customers.

The discussions between the Group's legal advisers and the USAO are ongoing. The Group is, under advice of its legal advisers, commencing production of documents and intends to cooperate with the USAO in its investigation.

Following upon the complaints dated 16 January 2007, banks in the US began declining to permit transactions involving the Group through accounts maintained at one or more automated clearinghouses in the United States. Additionally, the Group has been advised that the USAO has obtained court-ordered seizure warrants seizing funds pertaining to the Group's transactions. To the best of the Group's knowledge, it believes that the amount of funds seized by the USAO or otherwise restricted by third parties does not exceed US$ 55 million. These funds were largely in the process of being transferred from the Group to its US customers or vice versa.

As a result of the restrictions placed by third parties, court-ordered seizures, and related legal concerns, the Group is currently unable to make payments to US customers. Nevertheless, the Group is in discussions with the USAO to manage an orderly return of funds to US customers. As part of these discussions, it is contemplated that the USAO will engage a forensic accounting firm, at the Group's expense, to assist in this process and to examine the Group's financial position. "The return of funds to our US customers is a top priority for NETELLER" said Ron Martin, Group President and CEO. US customers wishing to withdraw funds from their NETELLER e-wallet accounts will experience ongoing delays while these discussions continue, and a further update will be provided by the Group once effective repayment mechanisms are determined.