US Takes Down LibertyReserve

The US government seized Costa Rica-based Liberty Reserve for allegedly financially supporting a huge network of cybercriminal activity and handling over $6 billion from online illegal operations.

Seven people are already in police custody for processing money laundering schemes. Among the detainees is Liberty Reserve founder Arthur Budovsky and co-founder Vladimir Kats who were arrested in Spain and in Brooklyn. Brian Krebs has more details on this here.

“Liberty Reserve is a criminal business venture…designed to help criminals conduct illegal transactions and launder the proceeds,” writes an indictment filed in the US District Court for the Southern District of New York. “It was a financial hub of the cyber-crime world” alleged to have processed some 55 million financial transactions for its approximately one million users from 2006 to May 2013.

As one of the world`s chief e-currency institutions, Liberty Reserve was the go-to financial company for numerous miscreants to silently move money from one anonymous account to another, operating as “a financial hub of the cyber-crime world, facilitating a broad range of online criminal activity, including credit card fraud, identity theft, investment fraud, computer hacking, child pornography, and narcotics trafficking,” the indictment reads.

However, not all Liberty Reserve clients were cybercriminals, BBC argues. Some people saw Liberty Reserve as a cheaper and more private alternative to other financial institutions since it allowed anyone with an e-mail address to set up an account and transfer money anywhere around the world. Liberty Service charged 1 percent per transaction, plus an extra 75 cent “privacy free” for anonymity.