Liberty Reserve aka LR. In other words, the most popular digital currency used widely in blackmarkets, credit card fraud, tax evading payments, illegal deals. Whatever, it was the best currency if you were to receive money from someone and wanted to be sure he couldn’t chargeback that money (just like stupid paypal would). Founded in 2002, and after a long 11 year period. Here we are with their website down since the past 24 Hours. Usually it would go down regularly around 10 times in a month and the planned downtime would be mentioned in their blog (http://blog.libertyreserve.com) before hand to let people know how long were they going down for and when they would be up, But this time. It has slammed the internet economy by going down for over 20 hours. Money is stuck, so are some deals that are to be made by some very important names in the blackhat circle.
Here is a duplicate copy of the news pasted on www.ticotimes.com
Costa Rican authorities raided suspect´s home and offices in San José and Heredia.
Arthur Budovsky Belanchuk, 39, on Friday was arrested in Spain as part of a money laundering investigation performed jointly by police agencies in the United States and Costa Rica.
Costa Rican prosecutor José Pablo González said Budovsky, a Costa Rican citizen of Ukrainian origin, has been under investigation since 2011 for money laundering using a company he created in the country called Liberty Reserve.
Local investigations began after a request from a prosecutor’s office in New York. On Friday, San José prosecutors conducted raids in Budovsky’s house and offices in Escazá, Santa Ana, southwest of San José, and in the province of Heredia, north of the capital.
Budovsky’s businesses in Costa Rica apparently were financed by using money from child Indecency websites and drug trafficking.
New York conviction
According to records from the U.S. Justice Department, on July 27, 2006, Budovsky and a partner identified as Vladimir Kats were indicted by the state of New York on charges of operating an illegal financial business, GoldAge Inc., from their Brooklyn apartments.
They had transmitted at least $30 million to digital currency accounts worldwide since beginning operations in 2002.
The digital currency exchange, GoldAge, received and transmitted $4 million between Jan. 1, 2006, and June 30, 2006, as part of the money laundering scheme.
Customers opened online GoldAge accounts with limited documentation of identity, then GoldAge purchased digital gold currency through those accounts; the defendants’ fees sometimes exceeded $100,000.
Customers could choose their method of payment to GoldAge: wire remittances, cash deposits, postal money orders or checks.
Finally, the customers could withdraw the money by requesting wire transfers to accounts anywhere in the world or by having checks sent to any identified individual.
Budovsky and Kats were sentenced to five years in prison for engaging in the business of transmitting money without a license, a felony violation of state banking law, but got probation.
Turns out Liberty Reserve was being run without a valid e-Currency License, and fooling customers over the past 11 years. About their website, it’s name servers are now pointing towards:
As is clear from this link – http://who.is/whois/libertyreserve.com
Shadowserver as quoted from Wikipedia is:
A volunteer group of professional Internet security workers that gathers, tracks and reports on malware, botnet activity and electronic fraud. It aims to improve the security of the Internet by raising awareness of the presence of compromised servers, malicious attackers and the spread of malware.
Shadowserver is famous for taking over compromised or infected websites. Consider shadowserver a team of whitehats working to clean the internet, now they wouldn’t take down a Payment System for no reason? Or would they?
A Quote from a new source – EHackingNews
Jonathan Capistrano who contacted LR about the status of peoples funds was told that they will not be closing down but are taking a break and that LR will be back “new and better” and finally said that funds will stay there , with no reduction or increase in value.
Let’s keep our fingers crossed and see what happens. If LR goes down, Things will change, and by things, I mean a lot of them.
I will keep you updated on this.
UPDATE: LR is officially dead.