Is Liberty Reserve a cryptocurrency?
Liberty Reserve was a Costa Rica-based centralized digital currency service that billed itself as the “oldest, safest and most popular payment processor, serving millions all around a world”. Liberty Reserve is alleged to have been used to launder more than $6 billion in criminal proceeds during its history.
Why was Liberty Reserve was shut down?
By May 2013, when it was shut down as a result of the Government’s criminal investigation, Liberty Reserve had more than 5.5 million user accounts worldwide, and had processed more than 78 million financial transactions with a combined value of more than $8 billion.
How did Liberty Reserve work?
Liberty Reserve performed essentially the same function as E-Gold had. It allowed users to send and receive payments without revealing details like account numbers or their real identity. The fee structure was low, only 1% or $2.99 per transaction, whichever was less.
What does washing money mean?
Money laundering
Money laundering is the illegal process of making large amounts of money generated by a criminal activity, such as drug trafficking or terrorist funding, appear to have come from a legitimate source. The money from the criminal activity is considered dirty, and the process “launders” it to make it look clean.
Where does Liberty Reserve get its money from?
Based in San José, Costa Rica, Liberty Reserve was a centralized digital currency service that allowed users to register and transfer money to other users with only a name, e-mail address, and birth date. No efforts were made by the site to verify identities of its users, making it an attractive payment processor to scam artists.
How is the value of virtual currency determined?
Most virtual currency in centralized systems has a fixed value whereby the controlling company sets an exchange rate. Often, this value is linked to some quantity of national currency. For example, one Liberty Reserve Dollar was equal to one U.S. dollar, and one unit of WMZ, a currency controlled by WebMoney, also is equal to one U.S. dollar.
When did Liberty Reserve open in Costa Rica?
Liberty Reserve was incorporated by Budovsky in Costa Rica in 2006. A 2007 interview with Joul Lee, the company’s marketing manager, claimed it was founded as “a private currency exchange system for import/export businesses” and opened to the public in 2007.
What’s the value of One Liberty Reserve dollar?
Often, this value is linked to some quantity of national currency. For example, one Liberty Reserve Dollar was equal to one U.S. dollar, and one unit of WMZ, a currency controlled by WebMoney, also is equal to one U.S. dollar. The value also may be fixed to some other real-world value.
