Fed’s Full On Assault On Currency Alternatives Goes Global

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Since the virtual currency Bitcoin began receiving widespread attention in the media as a viable alternative to cash, Federal agencies have been keeping a close watch on the startup and on firms with which it does business. The recent Federal attack on Liberty Reserve, another online currency, could provide clues to what government officials have in mind for Bitcoin and all future currency alternatives enabled by technology.

Liberty Reserve is an online money transfer system based in Costa Rica. On Tuesday, the Justice Department charged the company with money laundering and used the Patriot Act to lock it out of the American financial system in what Federal officials say could be the largest global prosecution of this type in history.

Arthur Bodovsky, 39-year-old Ukrainian native who moved to Costa Rica to start the business, was arrested along with five alleged co-conspirators who Federal prosecutors argue designed and operated Liberty Reserve as “a financial hub of the cyber-crime world, facilitating a broad range of online criminal activity, including credit card fraud, identity theft, investment fraud, computer hacking, child pornography, and narcotics trafficking.”

“Overall, from 2006 to May 2013, Liberty Reserve processed an estimated 55 million separate financial transactions and is believed to have laundered more than $6 billion in criminal proceeds,” the government’s indictment reads.

Officials go on to claim that Liberty Reserve “deliberately attracted and maintained a customer base of criminals by making financial activity on Liberty Reserve anonymous and untraceable.”

Police in 17 different countries were involved in the takedown.

The government has built its case around the fact that Liberty Reserve allowed its customers to anonymously convert money into virtual currency and transfer it from account to account with a 1 percent transaction fee. Justice and the Treasury officials say this allows criminals to hide the sources of their money.

“The global enforcement action we announce today is an important step towards reining in the ‘Wild West’ of illicit Internet banking,” U.S. Attorney Preet Bharara said in a statement. “As crime goes increasingly global, the long arm of the law has to get even longer, and in this case, it encircled the earth.”

More than 1 million people (200,000 in the United States) were users of the service, according to officials.

Sam Rolley

Staff writer Sam Rolley began a career in journalism working for a small town newspaper while seeking a B.A. in English. After learning about many of the biases present in most modern newsrooms, Rolley became determined to find a position in journalism that would allow him to combat the unsavory image that the news industry has gained. He is dedicated to seeking the truth and exposing the lies disseminated by the mainstream media at the behest of their corporate masters, special interest groups and information gatekeepers.

  • charliehanna

    What happens to legitimate users of the Liberty Reserve? Will the Fed do the same to Bitcoin?
    Maybe if the Fed stopped printing fiat dollars and we stopped the war on drugs by making them legal … we would not have any more “illegal money.”

    • Dennis

      The Fed will pump up Bitcion like it’s the next big thing to buy stock in, they will fund it to make it look good, then they will pull the rug out from under it so it will fall hard, very hard, the message sent will be, Never ever use another currency other than the Fed, it will be in the $$$$$BILLIONS$$$$$ lost by investors.

    • http://thecountyguard.org/ countyguard

      What is “illegal” here is the Fed going outside its jurisdiction, and not prosecuting the Federal Reserve for counterfeiting, and itself for treason against the American people… right along with most of Congress, and state governments. What part of unconstitutional does the federal government not comprehend? This could well be a scam against liberty reserve. The feds can make up anything they want against anyone they want. Moral of the story… cover your butt by taking precautions to prove them wrong in the end, but keep it quiet how you do it, and do it well. Hint, public declarations, contacts who know you well to witness for you, and… audio/video support they will never see coming.

  • jdn

    Its all about forcing people to only use paper MONOPOLY money so it can be taxed every time it is used , transferred or earns interest . tax , Tax , TAX .

    • FreedomFighter

      Nope, but it may be part of the bigger plan of implementation of the “chip” based cashless society, where none can buy or sell without the “chip”.Laus DeoSemper FI

  • hungry4food

    Heres why the DOW is Crashing !!!!!

    These links will tell you why the USA is economically in peril ,

    Create distrust in the fiat currency system is Underway !!!

    http://realcurrencies.wordpress.com/2013/04/07/the-dying-dollar/

    http://www.cnbc.com/id/100461159

    This link has a ton of links with info on what Wayne Allen Root talked about regarding the Obama Administrations policy to Overwhelming the
    economic system with distrusting misinformation that kills faith in the
    markets free and fairness . http://oneway2day.wordpress.com/tag/tony-newbill/

    But what this story talks about makes a lot of sense ,

    It’s Not About
    Obama… this is a really good read !!!!!!

    http://www.alt-market.com/articles/1526-its-not-about-obama

  • Dave

    I have question(s) for everyone, including the authors here including Bob Livingston.
    If we want to move towards a global free market, should not have one single global currency? Why not if you disagree.
    It seems to me when you have multiple currencies, it makes it easier for countries to manipulate the market through messing with its currency. What are the real dangers to national soverienty by have a global currency? Are the Germans less German now because of the Euro? I don’t think so.
    I would like to hear what others think.