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Crackdown on Online Money Laundering Service

Online currency exchange Liberty Reserve accused of laundering $6 billion over the past seven years.

By Treasury & Risk Staff | Updated on May 28, 2013

According to the New York Times, the Costa Rica-based currency exchange Liberty Reserve has been accused of laundering more than $6 billion for millions of clients around the world. “The charges outlined how the money transfer system operated, offering a glimpse into the murky world of online financial transactions that bounce money between far-flung accounts from Cyprus to New York in the blink of an eye,” the paper reports.

The service enabled a customer with no verifiable information other than an email address to transfer money around the world anonymously. A third-party would perform the actual currency transfer and would credit or debit Liberty Reserve’s account to reflect the transaction. This approach separated the transfer requests from the movement of the money, making it more difficult to track activity by the service’s users.

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