Liberty Reserve

Have you heard of the the money laundering case against Liberty Reserve in the news?Here’s a brief summary if you are coming in new:

Liberty Reserve stands accused of running  a $6 billion money-laundering operation online and being a central hub for criminals dealing in everything ranging from stolen credit card data and personal identity information, child pornography, online Ponzi and get-rich-quick schemes, computer hacking,unregulated gambling and drug-dealing .

Liberty Reserve, operated beyond the traditional confines of international banking regulations in the shadowy world of cyber finance. It traded in virtual currency and provided anonymous and easily accessible banking infrastructure.To transfer money using Liberty Reserve, a user needed only to provide a name, address and date of birth. But users were not required to validate their identity.One undercover US agent was able to register accounts under names like “Joe Bogus” and describe the purpose of the account as “for cocaine” without being questioned. This no-questions-asked verification system made criminals gravitate toward this digital currency alternative as a means to move, conceal and enjoy their ill gotten gains.Liberty Reserve was the preferred vehicle to transfer money in a number of high-profile cyber crimes, including that of eight New Yorkers looting $45 million from ATMs in 27 countries.

Liberty Reserve did not take or make cash payments directly and instead used “third party exchangers. These exchangers would take and make payments, and then credit or debit the Liberty Reserve account, allowing Liberty Reserve to avoid collecting any banking information on its clients and not leave a centralised financial paper trail. The exchangers,  were unlicensed money-transmitting businesses without significant government oversight or regulation, concentrated in Malaysia, Russia, Nigeria and Vietnam.