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  • Liberty Reserve Shuts Down!!

    Hi Folks,

    Seems Liberty Reserve has shut down!!
    BREAKING!

    Read below.
    Liberty Reserve exchange shuts down, founder arrested - CoinDesk

    *************************
    Liberty Reserve, a Costa Rica-based private currency exchange with its own digital currency, has shut down around the same time its founder has been arrested in connection with a money laundering investigation.

    Arthur Budovsky, the exchange’s founder, was arrested Friday in Spain, according to the Costa Rican newspaper The Tico Times. The paper reported that the money laundering investigation was a joint operation between authorities in the US and Costa Rica. (This YouTube video, posted Saturday, features a Costa Rican prosecutor discussing the investigation.)
    It added that US authorities are likely to seek to extradite Budovsky to the US.

    Liberty Reserve used its own digital currency — also called the Liberty Reserve, or LR — to provide payment processing services to customers holding US dollars or euros. Bitcoin Magazine credits Liberty Reserve with being “one of the chief enablers of the Bitcoin economy’s early growth”, noting that in 2011 Liberty Reserve and Dwolla were among the few services then available for people who wanted to transfer funds to exchanges to buy bitcoins.

    In addition to enabling such transactions for a low fee — a flat 1 percent with a maximum of $2.99 — Liberty Reserve, like Bitcoin, didn’t allow chargebacks. However, the LR exchange has experienced significant security problems several times in the past.

    In April 2011, it was revealed that Liberty Reserve customer information was accessible to Amazon. And a reported script problem in August 2012 ended up locking many users out of their accounts, some of which had thousands to tens of thousands of dollars in them.

    Liberty Reserve’s founder himself has had past run-ins with the law. According to Bitcoin Magazine, Budovsky and a partner — Vladimir Kats — were arrested in 2006 when US authorities determined their digital currency exchange, Gold Age, was conducting “money transmittal without a license”. The two were sentenced to five years of probation in 2007.
    Budovsky later left the US for Costa Rica, where he founded Liberty Reserve.

    Because Liberty Reserve enabled customers to set up accounts “using little more than a valid email address,” the exchange attracted a large number of users involved in cybercrime, security reporter Brian Krebs wrote Saturday in his blog, Krebs on Security. In fact, the first signs of the latest troubles for Liberty Reserve appeared on Thursday, before Budovsky’s arrest, when the exchange’s website went down.

    “The outage set off increasingly anxious discussions on several major cybercrime forums online, as many that work and ply their trade in malicious software and banking fraud found themselves unable to access their funds,” Krebs wrote.
    Around the same time Liberty Reserve’s website went offline, so did the sites for several other digital currency exchanges, Krebs added. They include asianagold.com, exchangezone.com, milenia-finance.com, moneycentralmarket.com and swiftexchanger.com.

    In the wake of these developments, Bitcoin users expressed mixed feelings about the potential impact on their preferred digital currency. Some said Liberty Reserve’s demise would prove a plus for Bitcoin, while others worried it could drive more cybercriminals to start using bitcoins.One reddit user had a more sanguine response.”LR was never a ‘competition’ to Bitcoins, it ‘lived’ totally on its own, therefore in my opinion, its closure has no effect on Bitcoins whatsoever,” noted reddit user Ponulens. “I used LR for many years, alone with other payment processors and its demise is simply a logical outcome for any and all payment systems out there, which are ‘short’ of getting money transmitting licenses all over the world and in US in particular. I’ve seen many of them “come and go” (e-gold, e-bullion, INTGold, StormPay, altergold, ePassporte… ) and for LR it was only a matter of time. The most important conclusion one should make from all these closures of the past, is to NEVER keep excessive amounts of funds in any of such payment processor systems.”
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  • #2
    Re: Liberty Reserve Shuts Down!!

    Wow, I think this took people by surprise. Thanks for sharing.

    Comment


    • #3
      Re: Liberty Reserve Shuts Down!!

      Its the true fact now that the LR has shut down and thus we need to look for other alternative. I feel sad for people who had LR stock.

      Comment


      • #4
        Re: Liberty Reserve Shuts Down!!

        more in this video on the blog....
        David News.com - Together with David against Golliaths!: Liberty Reserve Laundered $6 Billion, Bharara Says (Video)

        Comment


        • #5
          Re: Liberty Reserve Shuts Down!!

          Originally posted by Pinkrose View Post
          Its the true fact now that the LR has shut down and thus we need to look for other alternative. I feel sad for people who had LR stock.
          Was lucky never to use LR . Currently use Moneybookers for related transactions

          Comment


          • #6
            Re: Liberty Reserve Shuts Down!!

            Yes and I am not lucky because I am using LR. I need to find a new one..

            Comment


            • #7
              Re: Liberty Reserve Shuts Down!!

              And they have noticed the money laundry only after $6 billion?

              Comment


              • #8
                Re: Liberty Reserve Shuts Down!!

                Originally posted by techmac View Post
                And they have noticed the money laundry only after $6 billion?

                That's how these authorities work ...

                Comment


                • #9
                  Re: Liberty Reserve Shuts Down!!

                  I thought a lot of people would go die since they couldn't take their LR money. I was lucky my broker hotforex allowed me to withdraw my capital money that I deposited via LR to other payment methods.

                  Comment


                  • #10
                    Re: Liberty Reserve Shuts Down!!

                    It builds the foundation to the new era of bitcoin system.

                    Comment


                    • #11
                      Re: Liberty Reserve Shuts Down!!

                      Originally posted by alanfx View Post
                      That's how these authorities work ...
                      May be , at first , someone shared money with authorities and when it was not enough for them they began to notice things around.

                      Comment


                      • #12
                        Re: Liberty Reserve Shuts Down!!

                        there was always a gray area behind LR. but to be honest i dont think its about money laundring, and the figure is exaggerated.. there are some other reasons behind it and only god knows what, well im not using LR anyway, MB is another good option, a UK based money processor company. thats what i use for trading forex and small online gambling

                        Comment


                        • #13
                          Re: Liberty Reserve Shuts Down!!

                          Originally posted by willyforex View Post
                          Was lucky never to use LR . Currently use Moneybookers for related transactions
                          Then what's the fate of those who're denied access to online payment services because of their countries of origin and nationalities. Is that fair? LR was fair when it comes to non-discrimination. What led to their downfall is their failure to register with the appropriate authorities and observe the rules and regulations of the global financial industry. No-one says a company like LR should not exist; only that they need to follow due legal process for them not to run into trouble.

                          Comment


                          • #14
                            Re: Liberty Reserve Shuts Down!!

                            A lot of people got shocked with that because most of us uses LR for payment processor, but calm down everyone, I think instead of panicking, why dont we use other methods which is more safer than the others. Most brokers have a lot of available methods to choose from. We can still continue to make money and continue with our trading as well

                            Comment


                            • #15
                              Re: Liberty Reserve Shuts Down!!

                              And dont use moneybooker

                              Moneybookers - www.moneybookers.com Reviews | Online Payment Systems | Review Centre

                              Comment

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