Sentence Proves Digital Money Laundering is Still Money Laundering | dinbits


A few years ago, a company named Liberty Reserve was a "hub" for carders and hackers and were shutdown in 2013.

Last week, Arthur Budovsky, the companies founder who was arrested in 2013 was sentenced to 20 years in prison and ordered to pay a fine of $500,000 for money laundering.

Before any of the "bitcoin-is-bad" bashing crowd chimes in, this place was around long before bitcoin started.

Under the Liberty model, users needed only a name, email address, and their birth date which is hardly any form of acceptable KYC. Once registered these users could transfer money to other users. User deposits were converted into "Liberty Reserve Dollars" (or Euros) equating to the US Dollar, Euro, or Gold. Over 600,000 United States users according to the US Department of Justice.

Eight years, $8 Billion across 78 million transactions, 17 countries involved in investigations, one renounced US citizenship, and a guilty plea later, Budovsky will spend the next two decades behind bars after admitting to laundering between $250 and $550 million in funds in the United States.

"The significant sentence handed down today shows that money laundering through the use of virtual currencies is still money laundering, and that online crime is still crime," - Assistant Attorney General Leslie R. Caldwell. 
Ya think?

Co-defendants Maxim Chukharev and Mark Marmilev also pleaded guilty and were sentenced to 3 and 5 years respectively. Two additional parties linked to the case will be sentence later this year while two others are on-the-run.

This all goes to show that AML and KYC aren't just nifty acronyms, you really do need to know your customer and report your transactions so that in the event someone is laundering money its not your ass that ends up in prison for the next two decades.






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