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Digital currency exchange Liberty Reserve accused of massive money-laundering

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Digital currency exchange Liberty Reserve accused of massive money-laundering

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US prosecutors are calling digital currency exchange Liberty Reserve “the bank of choice for the criminal underworld” after the arrest of the company owner on suspicion of money-laundering.

Arthur Budovsky is one of five people taken into custody on Friday in the US, Spain and Costa Rica where the company is based.

US prosecutors claim Liberty Reserve has laundered more than 4.5 billion euros (six million US dollars) of money made through illegal activities including child pornography and the drug trade.

“Liberty Reserve was intentionally created and structured to facilitate criminal activity. It was essentially a black market bank,” said US Attorney for the Southern District of New York Preet Bharara.

“As alleged, Liberty Reserve deliberately operated in a way to attract and aid criminals who wished to use digital currency to break the law to launder the proceeds of their crimes,” Bharara added.

The exchange operated as an anonymous, no-questions-asked alternative to the global banking system using Liberty dollars – one of the most widely used digital currencies.

The site and others linked to it have been blocked since the arrests.