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Treasury names Liberty Reserve as “institution of concern” in alleged money laundering

140px-US-DeptOfTheTreasury-Seal.svgThe U.S. Treasury named digital currency provider Liberty Reserve on Tuesday as an institution of concern involving alleged money laundering activities.

The Treasury’s action comes just after a Manhattan federal court unsealed an indictment against Liberty Reserve and its principals. The court documents allege that the principals—Arthur Budovsky, Vladimir Kats, Azzedine El Amine, Mark Marmilev, Maxim Chukharev, Ahmed Yassine Abdelghani and Allan Esteban Hidalgo Jimenez—played a role in running a $6 billion money laundering scheme and operated an unlicensed money transmitting business.

“Treasury is determined to protect the U.S. financial system from cyber criminals and other malicious actors in cyberspace, including overseas entities like Liberty Reserve that facilitate online crime and hope to evade regulatory scrutiny,” David S. Cohen, the Treasury’s undersecretary for terrorism and financial intelligence, said. “We are prepared to target and disrupt illicit financial activity wherever it occurs—domestically, at the far reaches of the globe or across the internet.”

Liberty Reserve, which has operated since 2001 and is registered in Costa Rica, uses a system of internal accounts and network of third-parties to move funds. Once an account is established, transfers can be made from one account to another anonymously and instantly.

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