The operators of a global currency exchange ran a $6 billion money-laundering operation online, a central hub for criminals trafficking in everything from stolen identities to child pornography, federal prosecutors in New York City said yesterday, reports the New York Times. The currency exchange, Liberty Reserve, operated beyond the traditional confines of U.S. and international banking regulations in what prosecutors called a shadowy netherworld of cyberfinance.
It traded in virtual currency and provided the kind of anonymous and easily accessible banking infrastructure increasingly sought by criminal networks, law enforcement officials said. The charges announced by U.S. Attorney Preet Bharara mark what officials said was believed to be the largest online money-laundering case in history. Over seven years, Liberty Reserve was responsible for laundering billions of dollars, conducting 55 million transactions that involved 200,000 customers in the U.S. among millions around the world. Richard Weber, who heads the Internal Revenue Service's criminal investigation division in Washington, said at the news conference that the case heralds the arrival of “the cyber age of money laundering,” in which criminals “are gravitating toward digital currency alternatives as a means to move, conceal and enjoy their ill-gotten gains.”