The US government is charging a popular online currency exchange with what it claims is the largest money laundering scheme in history.
Attorneys for the Southern District of New York have charged the operators of Liberty Reserve with trafficking in $6bn worth of funds for activities including child pornography, cybercrime and financial fraud.
Designed as a secure and anonymous payment service, Liberty Reserve allowed users to transmit funds internationally without the need for monetary exchange markets or other financial institutions. According to attorneys, however, the company existed almost entirely to facilitate underground transactions for criminal activity.
US Attorney Preet Bharara said: “As alleged, the only liberty that Liberty Reserve gave many of its users was the freedom to commit crimes – the coin of its realm was anonymity, and it became a popular hub for fraudsters, hackers, and traffickers.
“The global enforcement action we announce today is an important step towards reining in the ‘Wild West’ of illicit internet banking.”
The US court said that it has indicted five people who are believed to be behind Liberty Reserve, including individuals based in the US and Spain. Two more individuals, last seen in Costa Rica, are also being sought as suspects in the case.
This is not the first time Liberty Exchange has been singled out as a facilitator of underground transactions. Earlier this month the firm was one of several Bitcoin operations singled out by security researchers as money laundering fronts for malware sales.
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