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May 13

U.S. Government Seizes LibertyReserve.com

Indictment, arrest of virtual currency founder targets alleged “financial hub of the cybercrime world.”

U.S. federal law enforcement agencies on Tuesday announced the closure and seizure of Liberty Reserve, an online, virtual currency that the U.S. government alleges acted as “a financial hub of the cyber-crime world” and processed more more than $6 billion in criminal proceeds over the past seven years.

After being unreachable for four days, Libertyreserve.com's homepage now includes this seizure notice.

After being unreachable for four days, Libertyreserve.com now includes this seizure notice.

The news comes four days after libertyreserve.com inexplicably went offline and newspapers in Costa Rica began reporting the arrest in Spain of the company’s founder Arthur Budovsky, 39-year-old Ukrainian native who moved to Costa Rica to start the business.

According to an indictment (PDF) filed in the U.S. District Court for the Southern District of New York, Budovsky and five alleged co-conspirators 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.”

The U.S. government alleges that Liberty Reserve processed more than 12 million financial transactions annually, with a combined value of more than $1.4 billion. “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. Liberty Reserve “deliberately attracted and maintained a customer base of criminals by making financial activity on Liberty Reserve anonymous and untraceable.”

Despite the government’s claims, certainly not everyone using Liberty Reserve was involved in shady or criminal activity. As noted by the BBC, many users — principally those outside the United States — simply viewed the currency as cheaper, more secure and private alternative to PayPal. The company charged a one percent fee for each transaction, plus a 75 cent “privacy fee” according to court documents.

“It had allowed users to open accounts and transfer money, only requiring them to provide a name, date of birth and an email address,”  BBC wrote. “Cash could be put into the service using a credit card, bank wire, postal money order or other money transfer service. It was then “converted” into one of the firm’s own currencies – mirroring either the Euro or US dollar – at which point it could be transferred to another account holder who could then extract the funds.”

But according to the Justice Department, one of the ways that Liberty Reserve enabled the use of its services for criminal activity was by offering a shopping cart interface that merchant Web sites could use to accept Liberty Reserve as a form of payment (I’ve written numerous stories about many such services).

“The ‘merchants’ who accepted LR currency were overwhelmingly criminal in nature,” the government’s indictment alleges. “They included, for example, traffickers of stolen credit card data and personal identity information; peddlers of various types of online Ponzi and get-rich-quick schemes; computer hackers for hire; unregulated gambling enterprises; and underground drug-dealing websites.”

A Liberty Reserve shopping cart at an underground shop that sells stolen credit cards.

A Liberty Reserve shopping cart at an underground shop that sells stolen credit cards.

It remains unclear how much money is still tied up in Liberty Reserve, and whether existing customers will be afforded access to their funds. At a press conference today on the indictments, representatives from the Justice Department said the Liberty Reserve accounts are frozen. In a press release, the agency didn’t exactly address this question, saying: “If you believe you were a victim of a crime and were defrauded of funds through the use of Liberty Reserve, and you wish to provide information to law enforcement and/or receive notice of future developments in the case or additional information, please contact (888) 238- 0696 or (212) 637-1583.”

It seems clear, however, that the action against Liberty Reserve is part of a larger effort by the U.S. government to put pressure on virtual currencies. In tandem with the unsealing of the indictments against Budovsky and others, Manhattan District Attorney Cyrus R. Vance, Jr., announced the formation of the “Financial Intelligence Unit” — a group that will work with the FBI, IRS and Secret Service to more closely scrutinize suspicious activity reports filed by U.S. financial institutions.

“Keeping our Office and its investigations firmly rooted in the 21st Century means mining unique troves of data previously unavailable to prosecutors and investigators to uncover wrongdoing,” Vance said in a prepared statement. “As financial information has made the leap from ledger books to online sources, this new unit will be tasked with making sure these sets of data are analyzed, which will enhance our prosecutions of everything from classic white-collar crimes to street crimes to cybercrime.”

Several of Liberty Reserve’s competitors have apparently seen the writing on the wall and moved to distance themselves from U.S. customers. On Saturday, digital currency Perfect Money posted a note to its site saying it would no longer accept new registrations from individuals or companies based in the United States. “We bring to your attention that due to changes in our policy we forbid new registrations from individuals or companies based in the United States of America. This includes US citizens residing overseas,” the company wrote. “If you fall under the above mentioned category or a US resident, please do not register an account with us. We apologize for any inconvenience caused.”

WebMoney, a digital currency founded in Moscow and probably the closest competitor to Liberty Reserve in terms of users and daily transfer volumes, started blocking new account signups from users in the United States at least two months ago, according to Damon McCoy, assistant professor at George Mason University’s computer science department.

McCoy said that on March 13th, 2013, WebMoney presented him with the following message when he attempted to create an account on the service: “The services and products described on wmtransfer.com and webmoney.ru and offered by WM Transfer Ltd. are not being offered within the United States and not being offered to U.S residents or citizens, as defined under applicable law. WM Transfer ltd. and its products and services offered on the site wmtransfer.com,webmoney.ru are NOT registered or regulated by any U.S. including FINRA, SEC, FSC, NFA, FinCEN, CFTC or ASIC.”

It’s also not clear how the government’s actions will impact Bitcoin, a peer-to-peer digital currency that is gaining worldwide currency and momentum. While Bitcoin’s distributed nature in theory lacks the geographic central point of failure that allowed the US government to take action against Liberty Reserve, currency holders rely on bitcoin exchanges to convert bitcoins into other currencies; those entities must register with the U.S. Treasury Department as money service businesses, and could become a focus point for banking regulators going forward.

As I noted in my story last week, the U.S. District Court awarded the Justice Department control over (PDF) not only libertyreserve.com, but at least four other currency exchanges that worked closely with it. In addition,  a civil action was filed against 35 exchanger websites seeking the forfeiture of the exchangers’ domain names.

Some of the bitcoin exchanges currently registered with the U.S. Treasury as money service businesses.

Some of the bitcoin exchanges currently registered with the U.S. Treasury as money service businesses.

One other big question looms large: How much data about Liberty Reserve’s customers was the U.S. government able to collect from this law enforcement action? According to The Tico Times, a Costa Rican daily newspaper, San José prosecutors conducted raids in Budovsky’s house and offices in Escazú, Santa Ana, southwest of San José, and in the province of Heredia, north of the capital.

But at least one cybercrime expert said it may be difficult for U.S. prosecutors and investigators to glean meaningful and actionable data from any servers or computers seized from Liberty Reserve.

“I would expect that there is a huge chance that most if not all of this data is heavily encrypted,” said Arkady Bukh, an attorney based in Brooklyn, N.Y. who has represented quite a few cybercrime defendants over the years. “Any case I’ve seen where we’re talking about more than $10 million, I always see very good investments in making sure that governments will not be able to penetrate the database without cooperation of the arrested parties.”

Five defendants, including Budovsky, were arrested on May 24. Vladimir Kats, the co-founder of Liberty Reserve, was arrested in Brooklyn, as were Liberty Reserve administrators Mark Marmilev and Maxim Chukharev. In a press conference today, Preet Bharara, the United States Attorney for the Southern District of New York, said the United States would be seeking the extradition from Spain of Budhovsky and Azzeddine El Amine, an account manager for the company.

Update, 2:58 p.m. ET: Added comments from Bukh, the phone numbers for Liberty Reserve account holders seeking more information, and the names of those arrested.

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315 comments

  1. So If money were clean I still can’t get them back? I have 2 children and now I have no money to feed them. I never did anything bad to US nor its citizens, why america is so cruel to me?

    • stolen creditcards

      You should also be asking why the owner of libertyreserve went through no effort to ensure the company would not be taken down. He didn’t register his company and made no effort to cooperate with the government, and hid funds in many bank accounts under many different names.

      The entire way the “bank” is structured is designed for obfuscation far above what any average person would need for privacy. The presence of legitimate money in the system is at best a meat shield to give the criminal acts an air of legitimacy.

      You may or may not follow the underground, but almost 100% of criminal services accept LR. LR made no attempt to fight this. You cant expect this to go on blatantly and openly forever when the owner clearly supports criminals. Even the money laundering banks in the US had to at least pretend to stop when the authorities took notice. LR didn’t even do that.

      You lost and it was unfair but LR was designed by criminals for criminals. Next time keep your assets in real money not fake money.

      • Ming-tun Chui

        LR is american company? Answer: NO.
        LR used american banks? Answer: NO.
        Why owner should cooperate with american authorities at all?
        Are americans ubermensch?
        Why they are thinking that everyone should obey them?

        I should use dollars and be american slave or otherwise i will be punished? That’s what you are trying to say?

        • LR is American company? Well, their domain is a “.com”, which is regulated by, and controlled from, the US.

        • stolen creditcards

          America wouldn’t give an f about libertyreserve if it weren’t for the fact that ~100% of carders used it as payment. identity theft ruins people’s lives. it’s not just an anonymous number on some big bank’s balance sheet. People in america are being attacked so they are within their rights to fight back.

          • ~100% of carders card with cards — why aren’t cards being abolished with? No cards, no carding! No money, no money laundering! This is “awesome concept”. 😉

        • i think is better then being chinese slave for sure

      • “You should also be asking why the owner of libertyreserve went through no effort to ensure the company would not be taken down. He didn’t register his company and made no effort to cooperate with the government, and hid funds in many bank accounts under many different names.”

        Why would a business in another country register with another countries’ government, and provide information on all of his customers worldwide?

        “The entire way the “bank” is structured is designed for obfuscation far above what any average person would need for privacy.”

        Obviously not private enough if a foreign government knows they all belong to him.

        “You may or may not follow the underground, but almost 100% of criminal services accept LR.”

        Almost 100% of criminals in the us accept cash (and im sure in other countries they accept the local currency). Should the people at the Federal Reserve be arrested? Actually I do agree with that…

        “LR made no attempt to fight this. You cant expect this to go on blatantly and openly forever when the owner clearly supports criminals. Even the money laundering banks in the US had to at least pretend to stop when the authorities took notice. LR didn’t even do that.”

        It isn’t a business’ job to fight crime, it is the government’s. If stolen money is sent to Liberty Reserves’ bank account, that transaction can be reversed. If they lose money this way, they will start caring who their customers are and whether their funds are stolen.

        “You lost and it was unfair but LR was designed by criminals for criminals. Next time keep your assets in real money not fake money.”

        Keep assets in gold? Oh like people who stored their gold with Liberty Dollar and traded notes, and got all their assets stolen? Or did you mean physical gold so the government can steal it like they did in 1933. Or did you mean fiat Federal reserve notes that they can just print more of and devalue your savings?

        • According to the BBC, the Costa Rican government alleges that LR had been refused registration in Costa Rica and continued to operate in the country anyway via shell businesses.

          Assuming for the sake of argument that the allegations are true, how is that not an illegal business?

          • Assuming for the sake of argument that this is correct, I am failing to see why (a) the US should be able to (b) do more than seize the domains, and if necessary why (c) Costa Rica shouldn’t be able to seize ONLY THE PROCEEDS/profits. Which is to say, the $2.99 maximum per transaction they make in *profit*.

            Mind wanders to story where motel owner who fully owns motel with no money owing on it gets entire motel taken because someone used drugs in it. Same country. Same legal system. Just a few ‘United States’ apart.

            I have a difficult time to believe that the profits were not kept separately in different accounts, or that the “defendents” named in the most biased and inflammatorily worded legal documents — that somehow also seem to lack any evidence of anything other than probably a civil crime in Costa Rica — that I have had the displeasure of reading — did not know exactly how much money they made. In fact I would have a difficult time not guaranteeing it for their own necessary business reasons.

            Which is to say this is a crime many times over, and I am not talking about the defendents being the true criminals.

            • I’m not sure what you mean. Costa Rica is surely legally entitled to shut down any illegal business, and seize any associated money until such time as they can sort out who it properly belongs to?

              From a legal perspective, I don’t even know who the money *does* belong to. Since LR wasn’t actually a bank, does that mean any money sent to it was legally just a gift to the owner? I’d hope not, but if you, say, buy a gift certificate the from a business the money belongs to the business. If they go broke, and can’t or won’t accept gift certificates any more, you can’t get the money back. Legally, it’s theirs, not yours, and this case seems uncomfortably similar to me.

              Regardless, I don’t see any straightforward method for the authorities to quickly return the money to LR’s customers, even if they were willing to assume that none of the customers had themselves obtained the money illegally.

              • The legal documents which are all linked to from the U.S. Attorney’s Office for the Southern District of New York (mouthful!) at http://www.justice.gov/usao/nys/pressreleases/May13/LibertyReserveetalDocuments from my reading seem to be explicit in stating the money is being seized by the USA. If it were being seized by Costa Rica then that would be filed separately, in Costa Rica. Which isn’t to say that Costa Rica wouldn’t get anything if the AUSA won this case. They kind of already have. And by bringing in the agencies they did I believe (but am not entirely certain; I am not after all an American lawyer, but maybe Mr Bukh will step in? Doubtful but one can hope) that they make keep the seized money regardless of the outcome, but I will need to research this further.

                At the same time, how does one fight a case with an entire government against one, not to mention several defendents, when all of one’s money has been seized and one canot even mount a defense. There is a reason that the US system has a 99% conviction rate — 97% plead, if I am remembering my figures correctly. They actually would have had a fighting chance to have a fair legal outcome in Costa Rica. By charging the way the US has they have guaranteed that whether or not they get extradition, they still get the jackpot, at least for the time being.

                I don’t know if you’re familiar with the Kim Dotcom story, but considering where you are from I am assuming you are. Putting aside any prejudices either of us may or may not have, this is pretty much exactly what they did with his bank accounts in Hong Kong (and perhaps elsewhere), if that helps in any way to set a precedent in your head. Again putting aside any prejudices about lifestyle, they did not even want to give him access to enough of his own money to pay legal bills. And let us say that he gets the case thrown out or he wins — he has still spent millions, or tens of millions, of dollars, most likely, in order to ‘fight the charges’ regardless of the outcome.

                If and when they extradite from Spain, they may perhaps earn some new confidential informants, if anybody offers to cooperate. And people who have an incentive to say things will almost invariably say things if it means they will not spend a life destitute and/or imprisoned. Let’s say one or more of these defendents know one or more interesting people and are willing to help the US government to arrest them. Now the US has not only caught several people they consider no doubt ‘funding terrorists’ in addition to ‘funding crime’ but they have netted, let’s say, tens of millions of dollars, gained intelligence they could not in any way gain legally, and also set upon a path to charge person upon person and so on down the line — and proof becomes less and less credible, because a chain of people have been manipulated where any particular link in the chain could be lying, out for revenge, or just trying to save their own skin.

                This belonged in Costa Rica, if anywhere, including the money. I’m not sure if you read this, but CR already seized about $20M USD in 2009. This belongs in CR and this belongs in a *civil* court of law, most likely for operating without a license, and with a capped amount for damages.

                Like tax evasion charges, though: Not so sexy. 😉

                • I absolutely agree that Costa Rica, not the US, should be handling both the prosecution and seizure.

                  However, I think that’s a different argument. Either way, LR would still be down now.

                  • Not necessarily. But to explain that I would have to explain how bizarre corporate law is in Costa Rica.

              • Also with regard to gift certificates, having considered how LR is used and how it functioned, I would consider it somewhat more like a lending library:

                I am giving somebody my cash (the exchanger) and they lend me a book (the currency they already have in their LR account — they generally do not buy per order, but will sometimes give good offers if they are low on a particular e-currency — and then just like if you went to a library and the book you wanted was not there, you might be able to request the book to be transferred inter-library from another location; this could be the other seller.

                So you have to obtain access to a private library, but let us say this library is not a ‘free’ library, because there are few taxes (let us call this LR’s fees), and you must donate the equivalent of a book if you want to take out another book.

                So you have paid an exchanger, who acts as a librarian. The librarian (the exchanger) then gives you, by way of the library (LR) a book (the e-currency).

                This book is the e-currency. It is the digital equivalent of the book that you gave the librarian in order to make use of the library. We can now consider your book an ebook; it can only be handled by one person at any given time, and you may not always know precisely who you are lending the ebook to but you know that someone will have the ebook.

                If you want to exchange ebooks (funds) with other users you may do so, but it is almost zero sum, save for the transaction fees you must pay the library for the privilege of using the system. You are just trading ebooks, which do have inherent value, because the library itself has received an actual copy of the book, and as long as only one person is using this demonic DRM’ed ebook, that book, in theory, is not going anywhere. It is sitting safe and sound in one of the library’s storage rooms (bank accounts or vaults) and will remain there until …

                You have finally received the last ebook you wish to read or trade. Since pages are more or less interchangeable in these ebooks, if you have not given away every last page of your ebook or ebooks, then you are entitled to the physical versions of whatever books you have collected. Or perhaps you have received more ebooks (which have book value according to the librarian and the library) because you have decided to barter for someone else’s use of the library outside of the library (bought them lunch, say), and are then entitled to however many physical books or pages of the book(s) they have entrusted to the library in care of the librarian. Now what?

                You would like to leave the library (LR), and be able to receive the physical copies of all of these ebooks you have collected, which the library (LR) has been keeping tucked away for when it can no longer offer your particular DRMed ebook and must (legally and otherwise) remove it from circulation.

                You will get the equivalent in a one to one ratio to what you have in ebooks/epages; you have paid the taxes for use page by page from your ebooks; this has been subtracted as you have traded these ebooks, already, so you may proceed to locate a librarian (exchanger) again and ask them if they will give N of their books or pages of their books in exchange for the ebooks you have.

                The librarian sees you have been a good customer and the library has not prohibited you from doing so, so they say ‘yes, we will take these ebooks from you, but since we are doing this for you you will have to pay us a small fee to ship the physical books to you. For this fee we will either obtain duplicates of the preserved books you have given to enter the library, or a close facsimile of the same and give this to you in the real world, so that we can keep these books in the library for the time being.

                So you transfer your ebooks and ebook pages to the librarian (exchanger), they take out the ‘shipping costs’ and ‘verify the address’ then send you a copy of the equivalent of the physical books that the library has corresponding to the ebooks that you are giving them. You now have a zero balance and no more ebooks in the library. You may still return if you are willing to start the entire cycle over again, and be able to start with a zero balance under the same library user name and maintaining the same reputation, provided you do not need to change your email address which we have verified.

                You do, still, however have had to have registered and sent documentation to the librarian, usually outside of the library, so that the librarian can route your ‘physical books values’ to you correctly and make sure it gets to you and not somebody else. With any luck this goes smoothly, you receive the buy-back for the value of what you ‘traded’ the librarian for, and can go about your day.

                This is long, imperfect, possibly terrible, and probably overcomplicated but I think I’ve given a reasonable idea of where I intended to go with it. A gift certificate expires. LR, provided it were not seized, in theory would not. A gift certificate can be cancelled. LR, by protocol, cannot be cancelled. The store or mall may shut down and take your ‘stored value coupon’ with it on its way out, but with LR you still have a set of physical ‘books’ somewhere that are digitally assigned to you, that you own, but which are kept on a whole lot of shelves together because there is no reason for each book to have its own shelf provided we know who the owner is.

        • “Why would a business in another country register with another countries’ government, and provide information on all of his customers worldwide?”

          Because if a business in country A wants to do business in country B (or with its citizens) then the business in A would better conform to and follow the laws of country B.

      • I agree. The question Liberty Reserve users should ask is, why did WebMoney — its closest competitor — stop allowing US citizens to register accounts more than two months ago? I’m not privy to the discussions that prompted that decision, but I find it difficult to believe LibertyReserve couldn’t have seen the writing on the wall. My guess is they did and just ignored it.

        • I’m not sure that I see how refusing to accept American customers is going to help all that much. Can you explain this?

          Is America really the only nation in the world that is likely to try to close down improperly operated financial services? Or is it just that they’re currently the best placed to spot such activity?

          According to the BBC, Costa Rica says that LR was operating illegally under Costa Rican law, so I don’t see that the American involvement was inherently necessary to the arrests or the shutdown. Besides, what’s to stop Americans sending money overseas by conventional means and *then* laundering it via an e-currency? Wouldn’t the American authorities still want to chase it down?

          • WebMoney operates in Russia. Russia is practically controlled by organized crime, if not heavily influenced. The government protects these crooks’ income sources and networks. We’ve seen groups like Russian Business Network operate with impunity under circumstances that might have led to arrest in US. Protection can also be bought. No doubt RBN, like many Russian crooks, paid their way to safety.

            So, if (1) WebMoney is a top criminal currency and (2) their operation financially benefits government, then (C1) WebMoney is probably safer than PayPal/LibertyReserve for crooks in general and (C2) is a sure way of doing business for connected Russian crooks.

    • They’ve robbed you because they can
      What can be worse to US Government than currency they cannot control?

  2. Keep robbing us and see how much further the us government takes it.

    If you want to do business with us yes use payment we accept. its that simple. if not we don’t trust you. Only someone not trustworthy wants to remain anonymous.

    They’re s alot of grey lines with everything…even with the child pornography and drug trafficking. But one thing I myself as an individual get upset about the most is the identity theft and credit card thievery that affects almost every American family. 1 out of 3 people. sickening. All the virused computers that are frustrating for the non savvy American to use. And its still hard to make living just fixing them cause most Americans would rather just use their android or iphones nowadays.

    You guys take all the good computer jobs away from Americans, and then come here and tell us you have to feed your family with some sort of lame excuse for suspicious behavior? With some unbelievable job title, especially for a supposed poor person?

    And i wonder if there is some inside trading going on with the money exchanges. Maybe could become a national security threat, could be maybe used by other state gov’ts against each other? Or maybe thats going a little too far with it haha.

    stop robbing us and we’ll stop robbing you.

    paypal should ban russians 🙂

    • Listen you… cretine…. if somebody pays with the US dollars is the US government responsible for the pornography. Remembeк about the e-gold.

    • paypal in in ass-hole in Europe. Like the US spaceship leading by their former director:))))))))))))

    • >You guys take all the good computer jobs away from Americans […skiped..]

      Are you taking drugs or something?

    • This is nice. I’ve never used LR to send money to the US. I’ve never used LR to receive money from the US. I’ve never used LR to transact to or from or through a US bank, nor have I ever used a US exchanger (if these even exist)…

      Which is to say what crime is it I committed to the US in the course of my average working business day would give them the right to assume that everybody did.

      I mean have you READ these legal documents? These were the most unprofessional pages I think that I have ever read from an Attorney’s office, or close to it, in the United States. It is like reading a University paper saying ‘why cows can fly’ and providing an answer ‘because the man in the moon told me it saw a cow fly over it several times in the past’ — we are to assume there is a man on the moon.

      This “case” was tried before it was even announced, both in the wording of the Grand Jury Indictment and the remaining legal documents, and in the perfunctory dismissal of everybody affected by it who doesn’t trade in dumps and pins of American residents or attempt to curtail the American tax system.

      Where is the justice, here, exactly?

    • > “You guys take all the good computer jobs away from Americans […] ”
      Hey you idiot, my hacker skills are better than yours! You americans can’t catch any good skillled hacker. And we, Russians, can!

  3. US government since their Busch-younger fucking bustard have become the real Naciz. They did not pity their citizenz – all them who wwere the victims of the fashist’s style probocation “9/11”. It was true technogeneric fail of their architecture and building industry indeed. There was not ANY muslim attack, the island moved to ocean under pressure from the central point where these buildings were placed. Now we have the next adventure from these cock-suckers. When anybody erase this empire of evil from the worlв map?

    • So i’m not sure what your saying here? Even if thats all true… Is that your excuse for robbing poor American families who had nothing to do with it? Who might even still be suffering from that tragedy?

      Does that not make you even more Evil then Hitler himself?

      • 1. Where is proof that american families were robbed by LR account owners.
        2. Where is proof that american families honetsly earned money. I believe that american families make child pornography and drugs.
        Show us proofs, stop talking

      • I need nothing to excuse. The US government has. And the americans will answer like the germans answered in 1945.

        • Several years later after many many thousands of lives have been heavily affected, all of our money and belongings have been plundered, and the world has become a place populated by frightened and abject slaves, afraid to open our mouths for fear of retaliation, yes. Then maybe we can have another few nuclear bombs dropped and the war can end and we can be ruled by another tyranny.

          Global rule of law is no better than global domination because it is global domination. If you control the money and the power, then how does anyone possibly have a chance to even argue with you? They do not, and can not, so you win, which is just how you want it.

          I particularly enjoyed where they are seeking 6 billion dollars in damages in addition to seizing the funds of all of the defendents and the associated business accounts.

          My brother Alexander, we are in the middle of it already.

    • You fail English? That unpossible.

  4. I would write a letter to as much of those 5 American Bureaus as you can. Giving as much id and personal information about yourself as you can and why you deserve to get your money back.

    • LOL and you think that they will give a damn about us? If they were really honest and willing to give us our money back, they should at least make a move about it. Just a damn official statement to everyone willing to get his money back may contact them? But instead they just seize everything and keep all the money for themselves, this is the U.S and as the guy said before it should be ereased from the world’s map.

      P.S: I have nothing against americans, but your governments and lobbies who take control of everything and brainwashed each and everyone of you with this FAKE democracy.

      • Now, now, let’s not talk about fake democracies. At least the US has had changes in leadership since 1999, and not just a game of ping-pong between two participants.

  5. As Megan McArdle said:

    if bitcoins become a good way to avoid government surveillance of your financial transactions, then governments will find a way to choke off those entry points so that bitcoins become very illiquid indeed. You cannot have a valuable currency that is good only for the purchase of child pornography and other highly illegal, entirely digital goods.

  6. From an article at Wired, it seems the US Government can effectively seize any domain registered through Verisign and any of its subsidiaries.

    http://www.wired.com/threatlevel/2012/03/feds-seize-foreign-sites/

    Why would Liberty Reserve have used a US-based registrar? just for the ‘.com’ TLD? Are other registrars at a higher risk for seizure from their host governments?

    • I suppose it will be great fall to US hosting industry. I know about the exchanger who migrated from the USA. But his reason was the bad SMTP service. Letters were received too late.

    • I agree and this has always bothered me — the insistence on .net, .com, and so on bringing in Verisign and domain registration in the US. While some may say it is reputational, I would say it is stupid. Reputation is earned. The .com was one of the things I suspected they would seize upon, as they are with the exchangers. I repeat though that while they perhaps should be able to legally strip the domains from these places, including LR, I see no reason why the US should be able to do much more. This is clearly a civil case that they very much want ot be criminal because in the United States a criminal case implies the permission to seize all funds and proceeds associated with a ‘crime’. There is no financial motivation for them to back off, that is for certain.

      The language in some of these documents even insinuates it knows what it is doing; the attorneys do not say ‘if’ they say ‘when’ which should be the biggest clue of all. And then we’re back to asking — wait is this a civil or a criminal trial, because if it is a criminal trial then shouldn’t these people who are just barely indicted have the right to be considered INNOCENT UNTIL PROVEN GUILTY.

      And it really does not matter because we all know how this will end — it will end the way the US wishes for it to end, even though if any prosecution does belong here it is by and for Costa Rica, and it is certainly not the entirety of the sum they are seeking.

      The reason we are seeing the US pursuing this so hard is not just the money — it is that it is far easier for the US to get the money because of the differences in law between CR and the US.

      As I’ve stated before, the US very very much does not like how things are done elsewhere. They are very willing and pleased to let other nations’ legal systems take part (with a chuckle and some amount of glee) when it means the corruption of evidence and illegal search and seizure, and the beating of prisoners in order to obtain confidential encryption keys. This is selectivity at its most disgusting, and hypocrisy at its apeks.

      • You are aware that the original development of the Internet was funded by the U.S. military, aren’t you?

        It just happens to have been deemed beneficial for civilians and made available to them.

        As for U.S. hegemony over the Internet, savvy people such as yourself realize that registering domain names with U.S. registrars, using Amazon for servers and financial institutions subject to U.S. law does introduce several points of failure into a system if you’re looking to be free from Americans.

        There’s nothing stopping you from creating your own system and putting up a “no Americans allowed sign”.

        The Berlin wall did wonders for keeping out the hordes of Americans and Europeans dying to get into the Soviet Union. Build your own version of the Internet and give the world a choice.

        • Of course it was, but that has exactly nothing to do with what I wrote.

          That is like saying Mr Coney Island El underneath you cannot get borscht because he is not where borscht was invented. Once it existed elsewhere, you gave up the right to make this argument. We have your recipes. You have our recipes. We’ve made progress as far as the internet also (and believe me DARPA/ARPA is nothing like it was when it was first designed — at all).

          Russia made it to space before you, but we do not prohibit you from going into outer space. 😉

      • Under the Coney Island El

        Technically correct about how long it would take… but the buzz in Brighton Beach is that the case was made a long time ago. With two of the accused here in Brooklyn the operation was likely penetrated, communications monitored, data dumped, accounts watched.

        That’s because one or more of the inner circle was flipped. IOW, making like Hector, aka Sabu of Lulzsec fame did as a co-operating witness.

        • Brooklyn friend,

          “Technically correct about how long it would take… but the buzz in Brighton Beach is that the case was made a long time ago. With two of the accused here in Brooklyn the operation was likely penetrated, communications monitored, data dumped, accounts watched. That’s because one or more of the inner circle was flipped. IOW, making like Hector, aka Sabu of Lulzsec fame did as a co-operating witness.”

          Had my suspicions about this, and hinted as much in a different reply, and in a number of replies to Saturday’s original post.

          There is a reason I made it a point to explicitly state Bharara’s name and try to nudge people into looking into the very dark history of his office. Boston is good at terrifying people into submission (or suicide), but New York excels at making inexplicable deals that fly in the face of all reason, like getting the winning American powerball number and getting struck by lightning within the same day; this office, from what I have seen, will delight in making you you hurt unless you hurt others; if you do it their way they like to leave you smiling while they do so — if you don’t, you may never even see a day in court but not because they’re being nice.

          I’d be glad to discuss things like this in private, if you want; I have no interest in further “waking any dragons” and everything I have said until now is public record I think.

  7. If everyone is so concerned about the U.S. being heavy handed, why are they not using Russian banks, the Ruble and Russian payment processors?

    Or Chinese, Malaysian, Nigerian, Romanian, etc?

    Perhaps there’s a reason many people prefer the USD and American regulations.

    It seems like the Liberty Reserve crowd prefers U.S. style banking security without any rules.

    Go ahead and create your own system and then completely lock out U.S. institutions, block Americans from using the system and don’t do any business with U.S. based businesses. Nobody will bother you at that point.

    • WE CREATED, WE HAVE AND WE USE. BUT YOU WILL NOT. OUR Perfectmoney, OUR Webmoney closed access to US residents already OUR OKPay will close too i suppose.

      • You’re breaking my heart.

        Could you please give me one reason I would actually want to use an “alternative” payment processor?

        I don’t try to evade taxes. I don’t try to hide my money. I am not buying heroin on the Internet and I am not playing Ponzi’s or running a money mule scam.

        Since I am in the U.S., I prefer to use U.S. banks with U.S. regulations and U.S. guarantees.

        And I have not found one person in the U.S. who would put up with the sky-high fees, non-existent protections and “here today, gone tomorrow” BS who’s either a) somewhat money savvy or b) not trying to pull a fast one.

        As for Perfect Money, I’m glad they are barring Americans (the really stupid people will find a way around the impediments) since they are supposedly registered in Panama. You are aware that Panamanian financial authorities have issued warnings on Perfect Money, aren’t you?

        Sorry, the script never changes. A large majority of the people using these “alternative” payment processors are playing some sort of game. Not all, but most.

        The good news is that the authorities are finally making it more difficult for really naive people to stumble into these scams. Good riddance to Liberty and hopefully PerfectMoney, STP and Payza.

        • Excellent post and rebuttal, dirty_bird.

          • Thank you.

            Without fresh meat, the scammers will start cannibalizing each other.

            My hope is that the authorities are finally erecting a few signs and a fence to alert people there’s a cliff nearby. If you bypass the fence and ignore the warnings to take a few pics, you do so at your own risk.

            • I think you’ve hit the nail on the head. If there’s no way to purchase something you want with ecurrency, then ecurrency will have no value. The hackers have had their way for a while, much as Al Capone did in Chicago back in the 1920’s. But Al Capone was brought down for TAX EVASION, not for murder, prostitution, drug or alcohol running.

              I think Tom “Scientology” Cruise is an idiot of the first magnitude, but his character in “The Firm” had a great line, something like, “I got their bank. The only way they can launder money now is in a washing machine.”

              Hackers are now playing on our home turf, the banking system. Bitcoin? Don’t make me laugh! 75% of Bitcoin is controlled by a very limited number of people, less than 100 I believe. You really want to make them rich? Ok by me. As someone noted above, about 90% of Bitcoin transactions are for pornography, prostitution, pirated movies, and the like. Closing off access to US citizens is a good thing. I hope EVERY similar currency exchange and payment processor follows suit. Other countries not willing to put up with cybercrime will probably join the US, and the money launderers will have no way to use their proceeds on anything they want. It’s absolutely brilliant!

              • Wait, you think the banking system is your home turf? Try the Middle East/Asia.

                • V, the whole point of money laundering is to take money you’ve stolen from a system and be able to inject it back into the system so you can gain the value of your crime. Now if all first-world (however you choose to define countries with a cooperative banking system) choose to join the US in banning their citizens from using payment processors and other money-laundering facilities, then criminals can no longer get the value of their crime.

                  You can pretend there is a system in the mid-east or Asia if you want to. And it’s certainly fine with me if there is something in those countries you want to purchase with your e-cash. But the ability to track money-laundering is what I was referring to when I mentioned “our turf.”

                  Let’s agree to disagree. A year from now I expect one of us will be proved right and the other wrong. If I’m right, more money laundering facilities will be banned by more and more countries, cybercriminals will have increasing difficulty in gaining the value of their gains, those who lose the proceeds of their crimes will continue to bellow like wounded elephants about liberty, freedom, fairness, and all the other things they only care about so they can abuse them, and a reduction in cybercrime. (No profit = less motive.) At that point it won’t matter how much we have argued about this, so I’m not going to spend much time doing it.

                • Not at all. If you don’t like the system, use a different one or build your own with your own rules. Use a jurisdiction beyond U.S. law. Perhaps Putin will run it for you.

                  As Toad and I stated, the thieves need lure unsuspecting noobs or unsophisticated “playas” into handing over their cash, launder it and get their hands on the proceeds. As it stands now, most people can google “get rich quick” and find HYIPs promising 1% per day or more. As the programs do a runner or get taken down, two more pop up. The “alternative” payment processors have been a key link. Until now.

                  I don’t feel sorry for the playas, but I do feel sorry for their families and loved ones who are hurt in these scams. In every Ponzi I have tracked, people have committed suicide and many, many people have managed to lose whatever little they have. Again, I don’t feel sorry for the playas, I do feel sorry for their spouses and children.

                  Taking down these payment processors is a step towards seeing fewer lives ruined. If people can’t stumble into these scams via a simple Google search, it will be an improvement.

                  Like I said, build your own system beyond U.S. jurisdiction and invite your friends to join. At least the naive will not be tempted by default by getting on the Internet.

                  As for alternative payment processors, I have run businesses for years and our family ran a travel business decades, transferring funds all over the world. We never had our funds seized by any government, never had payments refused and no clients ever lost money. We simply never had any need for any “alternative” payment system. The “corrupt U.S. banking system run by thieves and regulated by evil U.S. overlords” worked just fine.

                  • I believe my English may not have been explicit enough:

                    You did not invent banking or the banking system. There have been ‘barters’ with scrip for ages. Arabia gave us math. And Israel gave us modern banking.

                    • Who said the U.S. invented banking.

                      I am just saying that the U.S. has a long history of flexing its muscle when it comes to banking.

                      Read up on BCCI, their house of cards came tumbling down when they hired former Carter administration officials to in order to open U.S. branches.

                      Read up on BetOnSports. U.K. company offering online sports betting (legal in the U.K., illegal in the U.S.) with servers in Costa Rica. Their CEO got arrested when changing planes in the U.S. and they paid a $40 million fine. Their crime, in the eyes of the U.S., was not taking “reasonable steps” to exclude U.S. bettors.

                      Read up on how the U.S. finally got the Iranian sanctions to bite. The U.S. barred financial companies doing business with Iran from doing business with companies regulated by U.S. authorities. Apparently, the foreign companies value their U.S. business more than other business.

                      Read up on how Americans who hid their money in offshore accounts and tried to access their money via VISA and MasterCard ATMs. The U.S. required VISA and MasterCard to report U.S. cardholders to American authorities.

                      My point is that the U.S. has had a long and consistent history of “extending” their regulations offshore to companies doing business with Americans, American companies and companies doing business with U.S. regulated companies. None of this is new.

                      Liberty Reserve allegedly had over 200,000 account holders and allegedly did not take “reasonable steps” to exclude Americans from using their services.

                      I am not saying there are no legitimate reasons for using Liberty Reserve but I have been around long enough to smell a rat. Liberty Reserve was at the very least accepted, and more likely the preferred “currency”, of most HYIPs and similar scams.

                      If you sleep with dogs, you will wind up with flees.

                      If U.S. regulations are so onerous, that should open up banking opportunities for the 6.7 billion people that live outside of the U.S.

                      Your English is fine.

                    • No, it was my English that wasn’t simple enough for you. Persians and Arabs gave us mathematics and algebra and it may well have been Israelis who gave us banking (not that I necessarily agree with your contention. Adam Smith and some others, not all Americans, had quite a bit to do with modern banking.) But the question is who has the ability to model it, to understand it, to control it, to influence it, to detect problems within it. That’s our turf. I could hardly care less if you agree with me on this or not. I think the proof will be in watching money launderers continue to distance themselves from the US, and from other countries interested in cooperative banking … need I say Spain, Costa Rica, most of the EU, Japan, Australia, UK, NZ, … and I think you’ll see more of the launderers getting arrested, their funds seized, and more wailing from the users of such “businesses.”

                      Arguing with me isn’t going to affect the future. I can’t control what the authorities will go after next. So instead of arguing, let’s just watch for a few months and see who is right.

                  • If people are gullible enough to buy into HYIP or get-rich quick schemes — often the same people who are gullible enough to buy into becoming money mules — then that is not my problem or your problem (unless you are one of them, of course — but then that is only your problem). The minute you start regulating how people can be stupid, prohibit from them taking high risks, or in any way let them know they cannot decide their own fate you are taking away their sovreignty, and you are threatening to take away my own (even though I am neither stupid nor gullible enough to buy into these things).

                    Am I saying victims deserve to be victims? NO.

                    Am I saying that victims of themselves should live with the results of their bad decisions? YES.

                    And so should you, or you’re just feeding into a world that permits it to continue and forgives people for not learning lessons through their own experiences and their own cultures.

                    Darwinism got us this far. Abrogating personal responsibilty will only make us devolve — and it clearly is.

                    • The problem with your statement above is that identity thieves and computer malware authors and purveyors have used this to excuse their predations, i.e. if the owner didn’t want me to hack into his computer and steal his financial data and identity, he should have kept me out.

                      A lock on my door doesn’t mean, “If you can pick the lock, you can take anything on the other side.” It means if you are honest, you’ll stay out of my posessions.

                      If you aren’t honest, well just about anything that happens to you is fine with me. That’s just might makes right, and if that’s how you want to play it, ok. Might makes just as much right when the US convinces Costa Rica to shut down LR.

                      Once again, we’re back at the beginning. If you, and those who use LR won’t respect my rights and my security, don’t WHINE when I won’t respect yours.

                    • Let me add that what happened to LR is also Darwinianism. The question is, will people recognize it or repeat the mistake? Isn’t it funny how when something supports your contention, you are for it, but when it doesn’t, you ignore it?

  8. Other sources report that the founder’s name is Arthur Budovsky (not Author Bodovsky).

    • Hi Yuri. Budovsky is correct spelling (It’s spelled correctly in two other spots in the story). The copy above has been changed to fix that. Thanks.

      • Brian, I still see the first instance of his name in your article as “Author Bodovsky” FYI. (Missing an “r” and with an o instead of u.)

        Good work on this. Been interesting to follow along!

      • Thanks. That’s a very interesting story!

  9. NYT – “The closing of Liberty Reserve seemed to have an immediate chilling effect on cybercriminals, who were suddenly unable to access their funds over the weekend. In underground forums, they posted increasingly anxious comments about how to access their frozen funds”

    — I think this explains many of the semi-literate comments we’re seeing attached to this article.

  10. Hello,Mr.Krebs:)

  11. Criminal will just use Webmoney from now on or something else . Now they have to steal twice as much .

  12. Source: http://redtape.nbcnews.com/_news/2013/05/28/18560809-feds-shut-down-financial-hub-of-the-cyber-crime-world?lite
    Cybercrime expert Brian Krebs, who reported on the demise of Liberty Reserve on his blog on Saturday, said Liberty Reserve users are horrified by the potential loss of the money in their accounts. One told him he stood to lose $25,000. Others seemed in denial that the site had been shut down by government investigators.

    “Only update this thread with positive news,” wrote one. “Only thing I want to hear is LR will be back soon.”

    Cyber-criminals have other ways to exchange money, but Krebs said Liberty Reserve was probably the most accepted form of payment in the computer underground. It’s shuttering could disrupt electronic criminal activity, but Krebs said other virtual money systems will probably pick up the slack.

  13. Where is the difference to a war-criminals swiss bank account that is so anonymous, that only a number allows access?
    Whats the difference to a Western Union shack in London, that is run by a criminal who cashes out to anybody paying him 25% of the sum without asking for any ID?

    • I think the main difference is that in both of those examples the business in question follows the laws of the nation that it is located in.

      • Liberty Reserve was never based in the US.

        • According to the Costa Rican representative, as quoted in the BBC, LR was operating in Costa Rica and breaking Costa Rican law.

          Dr. Egg’s examples were of a business operating in Switzerland and obeying Swiss law and a business operating in England and obeying English law. Really not the same thing.

  14. “As noted by the BBC, many users — principally those outside the United States — simply viewed the currency as cheaper, more secure and private alternative”

    No, that is not what BBC News noted. Their exact words were “others said they had used the service for legitimate means” which does not necessarily imply “many.” The word “others” could imply that only a handful of non-criminals lost money.

    Wired’s story on the subject (http://www.wired.com/threatlevel/2013/05/liberty-reserve-indicted/) used the phrase “Although the service had legitimate customers” which also does imply any sense of magnitude.

    The indictment stated in section 10 that “virtually all of LIBERTY RESERVE’S business derived from suspected criminal activity.” We will not know what percentage of Liberty Reserve’s business was non-criminal for some time, with that information being announced by the FBI at a future date. That said, I think the phrase “virtually all” speaks volumes.

    • Your very last paragraph actually proves my point, saucymugwump, whether you want it to or not. To quote:

      “The indictment stated in section 10 that “virtually all of LIBERTY RESERVE’S business derived from suspected criminal activity.” We will not know what percentage of Liberty Reserve’s business was non-criminal for some time, with that information being announced by the FBI at a future date. That said, I think the phrase “virtually all” speaks volumes.”

      Which is very very funny considering they in no way had the time to even READ NAMES of the people in the database much less do ANY forensics, accounting, computer, or otherwise. In other words, they are making shit up based ENTIRELY AND WITHOUT QUESTION on assumptions unless they have been doing man on the middle SSL traffic hijacking since the service’s inception, and have investigated ‘virtually all’ users — when in fact they have likely only investigated a few handfuls, and before these seizures were even performed.

      This is like going into a science experiment saying you’ll find something when the truth is you have no clue what you will find — you just have to get the bastards to fund your research so you bullshit and make things up until you can prove what you hope is a correct assumption. And they know that these figures cannot be correct going into this. The way they are stepping around this language is by calling anybody a criminal that visits the site — and in fact anybody that wishes to perform any anonymous transactions at all, including cash.

      I am sure you cannot find a SINGLE FORENSICS PROFESSIONAL who can argue that they could have in ANY way processed evidence that was seized a couple of days ago and is not even IN THEIR LABS YET. In fact given the mass of data that no doubt has been seized, They would still doing full dd’ing of the drives to preserve evidence still, if they’d even started already, and I can guarantee they are nowhere near doing that yet.

      In other words, THEY LIED.

      “Wake up and smell the coffee”, as the saying goes.

      • “Which is very very funny considering they in no way had the time to even READ NAMES of the people in the database much less do ANY forensics, accounting, computer, or otherwise”

        You assume that work started from square one last week. You know quite a lot regarding Internet theft, but you are simply clueless regarding law enforcement.

        “In other words, THEY LIED”

        Or maybe they had an inside human source all along. Or maybe Budovsky and the boys are not as intelligent as you assume, with one or more of them having bragged of their superiority to an FBI agent over the past few months, spilling the beans, coffee or otherwise. Or maybe one of the boys is cooperating with authorities after it was pointed out that he might spend his entire youth in prison.

        • But then you are saying the US government lied in another way — namely that they WERE collecting enough information on people, and as far as I can tell in NO WAY was I ever required to state what I was buying or selling. It was an option, sure, but you’re telling me that a place teeming with liars and crooks will be honest? Some will (yes I have read eGold documents), but really, you’re telling me EVERYBODY did… And then you’re telling me EVERYBODY was committing crime, and then you’re telling me someone sat down and personally parsed these use statements that WERE given, one by one, probably translated from a hundred or more languages and dialects…

          Right. This happened.

        • But mostly I want to know where you saw proof; I have seen no proof of illegal use by users anywhere at all, including the indictment. What I have seen is assumptions and innuendo: You are telling me they did illegal things, but you have not shown me nor provided me with ANY evidence whatsoever. A grand jury should require evidence to indict. Being told ‘these are bad men so they should be indicted’ — if it happened that way, it shouldn’t, and if it didn’t, then there should be at least a few examples to show (a) criminality (which let us face it — we both know was present there, and I’ve never denied this; it is present *everywhere* and in every monetary system) and (b) this blatant adjectival mumbo jumbo and exagerration. If you have proof that almost everyone on there committed crime, without just before stating that the act of being there for everybody REGARDLESS OF WHERE THEY LIVE is illegal, then I, and everyone else, should see it. What I *have* seen is an affadavit that ‘someone’s doing bad stuff on the internet!’ from a secret service agent and then the indictment saying ‘we have proof that everyone is doing bad stuff on the internets! EVERYONE!’.

          Granted law is not science, but there is a burden of proof here, and it comes BEFORE an indictment, or should as far as the legal system is concerned, and I will repeat — there is ABSOLUTELY NO WAY, even with a copy of the database, that they can make this claim unless they are retroactively saying something is illegal for everyone across all borders… for instance using an exchanger… And that just doesn’t exist. And even if it did, someone could still just say ‘happy birthday, have some LR’; You could make this illegal but where? And how? and for WHOM?

          I will state again what I stated before: They are doing things this way because they want the money and they want to avoid having to deal with the problems of their own citizens breaking their own laws. This way they get the money, don’t have to pay for trials or imprisonment, and do get to avoid all sorts of messy questions except for one:

          What gives them the right to seize the money to begin with, and what gives them the right to make blanket statements that quite simply cannot and could never apply to everyone (or almost everyone, because they seem to be saying, hey, I bet there is someone out there who isn’t breaking the law, maybe two people, better tread lightly here, but we can certainly make this sound goddamned impressive!

      • For all you know Spanish, American, and Costa Rican authorities had remote access to the entire LR database due to an unpatched SQL injection attack or other security blunder.

        • Not impossible, but it would in no way contradict what I just wrote above.

          • The hell it doesn’t. If they had remote access to the entirety of their criminal organizational structure, finances, and, basically, everything then the authorities haven’t – as you put it – “In other words, THEY LIED.”

            Fact of the matter is it could be either my explanation or your explanation or somewhere in-between, but to make broad assumptions about what is true without any factual information is asinine.

            They hardly need to seize servers and files in order to gather information, the information gathering process rarely if ever starts after the equipment has been seized. It began a long, long time ago and likely something (like sudden access to new evidence) tipped the balance over to seizure.

            Remember, not every government employee in the world is corrupt and incompetent. Making rash assumptions that they are will lead to the kind of mistakes that result in Russian computer criminals leaving huge troves of personal information on the internet.

            • My lying implication regardless of SQLi or an informant stands, if you read it; I split my comment up. The fact of the matter is you cannot prove intent on the part of the customer even if you are the runner of the site unless you are omniscient, have monitored the transactions of everybody outside LR to get into and out of LR, and/or everybody not only filled in the ‘note’ section but filled it out completely accurately… and those bigger crimes you are all so worried about: They wouldn’t have.

              So they really would have exactly no way to know whether the site was or was not used to carry out ‘virtually all’ illegally as they very bluntly exaggerated. Have you read the indictment and exhibits?

            • PS: I’ve never said I thought they were not competent (of course they were far less competent 5-10+ years ago). But this is not a matter of competence or incompetence. Most cases are driven by agents who either find a case easy to make or else who they very much have a ‘hard-on’ for the person they want to charge (often out of proportion to the crime itself) when it comes to computer crimes. I’ve seen this latter, especially, far less often in things like mortgage fraud, typical ponzi schemes, and most other white collar crimes — if you read these sorts of indictments, the language, the methods, and the general atmosphere of the case is remarkably different.

              If anything this gets handled more like terror or drug crimes, which is to say sensationally. If somebody walks into a movie theater with 200 people in it with a gun they legally own and carry, and no intent to shoot it, they are not charged with 200 cases of attempted homicide, even if they have 200 bullets in a bag.

              As to troves of personal information and Russians — many already do (in my opinion rather ridiculously, and usually not in English, which no longer matters much) — but so do many other nationalities.

  15. lol @ goverment

    The goverment really need’s to stop getting in other countries fucking business when they didn’t ask for help. I strongly believe that the US Gov’t was the one that pressured Spain in to allowing them to “help out” in this operation.

    LR didn’t have to to register shit in the US because they’re a company in Spain & even if they did not register over there its non of the US’s fucking business. Carders/cyber-criminals will just move one to the next service and then the next one after that one shuts down as well. I’m sure that many US bank accounts are used by criminals. I don’t see the US shutting them down.

    • If Americans are registering and it is against the law according to American authorities for them to use the service, then Americans are breaking the law, not the service in the foreign country. One of the basic tenets of law in the United States, often put to very poor effect, is that ignorance of the law is no excuse for breaking the law.

      Which is to say this has absolutely nothing to do with the United States from LR’s end. It has to do with the US not wanting or being willing to individually prosecute/persecute the hundreds/thousands of people in their own country that are breaking their laws individually. This would cause a massive burden on the US “Justice System” and would certainly not bring in $6,060,000,000.00+ dollars. Yes, that is the correct number of zeroes. No the US will not be able to get it because the $6B portion is them doing what bookies do — cooking numbers to look impressive. What they do come out with is probably at least $60M USD and the ability to sidestep investigating, prosecuting, having to punish, and having to pay for the incarceration of the people who have actually broke their laws.

      All in all, this is what could be called a major coup, and Mr Bharara really likes this sort of ‘coup’ just as much as he likes to play with what ‘cooperation’ and ‘punishment’ and ‘criminal’ and ‘justice’ mean.

      He will probably be in politics within the next decade.

    • Of course LR didn’t have to register in the US. But, since they were (allegedly) based in Costa Rica, they did have to register in Costa Rica.

      The accused should be extradited to Costa Rica, not to the US. But I don’t see any reason why the US shouldn’t be allowed to help Costa Rica to enforce Costa Rican law.

      • New York requested Costa Rica’s help, not the other way around.

        This is being charged as a US case, with a US seizure, and a US series of confiscations of bank accounts all over the globe. The US is requesting extradition of the operators of LR. This is in every way the US’s show.

        It’s not CR asking for help.

        And: Bias.

        • Indeed, this is a US show, and it shouldn’t be.

          But I don’t agree with the OPs implication that the US wasn’t entitled to at least point out to Costa Rica that LR was breaking Costa Rican law, and ask Costa Rica to prosecute accordingly. Nor is it true, AFAIK, that LR are being accused of failing to register with US banking authorities.

          • “But I don’t agree with the OPs implication that the US wasn’t entitled to at least point out to Costa Rica that LR was breaking Costa Rican law, and ask Costa Rica to prosecute accordingly.”

            They were certainly entitled to point out that LR was breaking CR law, and CR was certainly entitled to prosecute, according to CR law; what I have read has about 0 bearing on CR law. It gets even more fun when we start talking about the concept of incorporation in CR, where many people are something like ‘personally incorporated’ many times over.

            One reason this is so funny to me is that there are no online sources, or were not last I checked, nor even easy physical access, to the CR criminal code, even in CR. Which gives the US a further advantage in that almost nobody short of a CR lawyer or someone versed in CR culture and incorporation, could possible rebut or refute anything that is said by the US, and you’ll note that no equivalent legal filings by CR have been made available.

            I might have considered this somewhat less dubious if CR had done these seizures, pressed their charges, filed their indictments, and gone through their trial process and then — at some point later in time — the US tried to join in, then maybe — but only maybe — I might consider being slightly less circumspect.

            I am pretty sure this is still in the civil law realm though, as a surprising number of things in CR are, which is one reason this strange sort of concept of multiple personal incorporations/’insurance policys’ of sorts exists. I do not, at all, expect the US to take this into consideration either, which is yet another convenience of prosecuting in the US, even though as far as I can tell the only ‘crimes’ they committed was having a correspondent banker fund things once or twice through a bank in New York — which is how this became open to New York criminal prosecution. That said even if it were a valid case, it should only be the accounts involved in question, and nobody else’s money should be touched.

            The correspondence banking thing was an error they are paying for, as is the .com domain, and probably one they were less likely to see coming and maybe even know occurred, but it still does not explain a lot of things about this prosecution. For instance it doesnt really prove that having that money pass through a New York bank on its way to Cyprus for a few minutes or whatever it was constituted ‘laundering’. On the one hand they are shouting ‘you cannot be legally registered here! move!’ and then on the other hand they are saying ‘how dare you move your money out of this country so that you can move your company the way we pretty much said we were forcing you to move.’ It’s a Catch-22 in too many ways.

            “Nor is it true, AFAIK, that LR are being accused of failing to register with US banking authorities.”

            The legal charges still don’t make sense unless the business itself was paying people in the US. If we are willing to assume, which I am not quite but I can believe it, that the exchanges the defendents themselves ran did do business with US customers, then that would open those businesses and individuals up to scrutiny, but that would have nothing to do with the underlying system, which was clearly domiciled, much to CR’s chagrin, in CR (which has a lot to do, near as I can tell, with where charges should be filed). They were clearly incorporated, and separately, so putting them under the same umbrella itself is questionable, which is why I’ve stated again and again — where in all of this is the evidence? All I have seen in these documents is a lot of rhetoric (and I’m sure you know by know — I know rhetoric ;)) and a WHOLE lot of deliberately obtuse conjecture.

  16. To all those still missing what LR looked like, Calm Down! you know it had to be back right? check it out here…. http://is.gd/kj9xvR

    and the next thing is, the web url will be crypto only to be accessed via QR code

  17. remember that every lock has a key jajajaja

  18. Brian, I wanted to thank you for trying a little bit harder this time to sound at least a bit more even-handed.

  19. Dennis DuBose

    I think it is time to close this comment segment.
    I have heard enough “right/wrong” “good/bad” philosophy to last for the rest of the year.
    The old saying “if you lay down with dogs with fleas, you get up with fleas!”

  20. As I said in the previous post on this, if someone wants to do what governments don’t want them to do – i.e., establish a service that provides things governments don’t want people to have, such as privacy, anonymity, firearms, secure crypto, etc. – sooner or later the government is going to move against those services – whether legally or not.

    First they’ll expand the enforcement or definition of existing laws. If they can’t shut them down under existing laws, they’ll make new laws.

    The lesson is: go fully underground or go home.

    As as anarchist, I understand that the government is the enemy. Period. End of story. The people complaining about such actions as these still are controlled by cognitive dissonance, i.e., they think the government “should” behave in other ways they’ve been taught are the “right” ways.

    This is the myth of America – that America is somehow a different phenomena in history that is supposed to be “free”.

    Just like the notion of “security”, there is no “free” – except by one’s own actions and continual vigilance.

    The US government bombs civilians in multiple countries around the world. Studies have shown the vast majority of people killed by drones are civilians unconnected to terrorist groups. If the US government couldn’t care less about that – even if the target is actually a US citizen such as Awlaki – why does anyone think the US government cares about “collateral damage” in a financial seizure (or a file seizure like Megaupload)?

    “Fool me once, shame on you. Fool me twice, shame on me.” “See the new boss, same as the old boss. Won’t get fooled again.” Or was just that George Bush who messed that up? 🙂

    • Richard,

      I was wondering when you would finally arrive! Welcome to the conversation. 🙂 I hope you had a good holiday weekend.

      Care to join me in my futile quest to turn the tide of opinion?

    • “As as anarchist, I understand that the government is the enemy”

      Then why haven’t you moved to Somalia? There are no pesky laws to interfere with your hobbies. Of course, there is a plethora of armed, violent men walking around, but one must follow one’s dream, mustn’t one?

      Or how about China? It is crystal clear that businessmen can do anything, including the poisoning of little children via melamine-tainted milk, as long as they do not interfere with or criticize the government. China is the best example of pure capitalism in the world today.

      • You’re confusing “anarchism” with “social chaos”.

        Which is to be expected from those who don’t know the political philosophy of anarchism or the history of the state and those who still believe in the myth of “American exceptionalism”.

        • I am not the one who is confused.

          The problem with anarchists is that they cannot imagine what no government would actually be like because they already enjoy a certain level of comfort provided by society. Somalia is anarchy, whether you like it or not. And since many humans tend to be violent and selfish, it usually ends badly. That’s why mankind slowly developed the concept of government, as well as to provide services, e.g., water and roads.

          Actually you are correct. Somalia is not true anarchy. True anarchy would be what we had about one million years ago. I’ll pass.

          • Actually if you look at the history of the state, it did not develop as a means on controlling chaos. It developed as a criminal enterprise based on extortion and protection rackets.

            i.e., once humanity developed beyond the tribal stage, the bandits learned that running a protection racket on villages was more profitable than just raiding them. In other words, “you pay us a share of your production and we’ll protect you from the ‘other’ bandits.”

            All of this mixed in with appeals to divine authority and the like.

            I’ve always considered “The Magnificent Seven” the most “anarchist” movie ever made. We have the bandits extorting supplies from the villages, the villagers hiring an “anarchist protection company” – the Seven – for protection, and eventually the villagers themselves rise up against the bandits – the ultimate in self-regulation.

            The essential nature of the state is as follows:

            “You give us everything you have and do everything we tell you and we’ll protect you from the ‘Bad Guys’ inside and outside our borders – and if there aren’t any ‘Bad Guys’, we’ll make some.”

            The fact that there are “Bad Guys” doesn’t justify this process. The end result is the “Bad Guys” (who look like us anyway) end up running the show.

            It’s pathetic.

            • I know I’m wasting my time … but there are times when I don’t mind wasting it.

              I am not a fan of the government, but what would we have without it? With no government, when you took a vacation, you could easily return to a house empty, burned down, or just taken over by someone else who wanted it. For that matter, with no government, someone could just walk into your house and take it. Yes, you can be there with a shotgun and stop them, but do you plan on sleeping? Want to eat? Need to do something to make money? How do you defend your house then?

              Are you able to kill your own meat? If you want to purchase it, do you expect some level of quality? Sure, if the local butcher loses too many customers to salmonella, he’ll go out of business – how many of your relatives do you want to lose before this happens?

              Would you like power and an Internet? Sure you can mine your own copper, build your own power station, and run lines to whomever you want to talk to. Is that what you want to do? What about standards? If you generate power at 110V 60 hz, and the person you want to connect with uses 24VDC, who converts? What about communications? If everyone takes whatever they want, who keeps someone from trampling on your signal? Do you go hunt them down and shoot them?

              Medicine. You planning to be a doctor as well? Actually you’ll need at least two, unless you personally plan on never getting sick or hurt. Pharmacy, same thing – planning on producing your own medicines? Clothing – I can just see you sitting at a spinning wheel, turning sheared wool into thread, putting that on a loom to make fabric, and then sewing that into your clothing.

              Anarchy sure sounds wonderful, until you actually think about what it entails. In reality, it’s the Dark ages, where people were poor, barefoot, had one set of clothes (maybe) and lived short, ugly, painful, hard-working lives. If that’s how you want to live, OK by me.

              • Actually, when I said “make money” it was a mistake. No government means no money. Let’s change that to “mine your own gold and mint your own coins. Then you also get to add in the fun of bartering whatever you have a surplus of to someone else for whatever you need.”

                We had that in California in the 1840’s, when gold miners were charged an average of $32 for a single chicken egg. Yep, those sure were good times to be alive.

      • I can’t resist because you keep bringing up this melamine thing. Enough with this melamine obsession already. Or do I have to list all of the insane ways chemicals are leaching into your ground water, power lines are giving your children brain cancer, and nuclear waste accidents are covered over. Cancer clusters? Go on? Or should I go into product tainting, or the concept of allowing things to slide because it is cheaper to pretend to ‘settle’ a law suit than it is to fix a problem?

    • They drone killed a ‘#2’ in Pakistan just in the news now. They sort of glided over the rest of the ‘7 people were killed’ part. This is actually a very good parallel to what is happening now.

      I am curious if hostage negotiating rules have changed now also in the USA or is it acceptable now to just let all hostages die so you can kill the hostage-taker?

    • Although I would dispute the superiority of anarchy, the gist of your post is correct. I would already have had an online money moving service running years ago if I thought it would survive. People assume too much in way of laws. In these matters, the US government acts more like the libertarians’ description of them: a mob.

      A mob’s goal is money and power (esp control). This works for the few at the expense of the many. In US, 1% own over 40% of the wealth and contribute to campaigns of most key politicians who pass laws that benefit them. LEO’s keep the 90+% in check and the mob’s pyramid scheme working smoothly (mostly). LEO’s, military and intelligence are there to attack the mob’s enemies, protect the mob’s profitable assets, and acquire new assets. The mob has also ruled itself above Constitution, Law and Humanity many times.

      You quoted the drone strikes. I’d be quicker to mention Americans shot in head during SWAT raids that weren’t justified or thrown on rendition flights to be tortured in foreign countries. Add in IRS freezing a defendants’ bank accounts (good luck buying a lawyer), FBI taking critical business assets w/out a conviction, wholesale surveillance, etc. and you have a mob government that routinely causes harm to the populace it supposedly protects.

      Knowing all of this, the actions against Liberty Reserve should be no surprise to anyone. That it was a dirtier operation than most made things even easier. The only people even close to being immune to this mob are internationalists with plenty of money, practical security/privacy knowledge, and a citizenship that lacks the words “United” “States” or “America.”

      As for moi, I currently don’t meet those criteria so I’m not planning on becoming US government’s Public Enemy No (1-anysignificantnumber) any time soon.

  21. By the way, speaking of Costa Rica, anyone here remember Robert Vesco? He nearly bought the country.

    Where’s he now? Cuba?

    • He died from lung cancer in a Cuban jail. Not the peak moment of his life, I guess. 😉

  22. Uncle Sam Man

    Kudos to Brain Kregs for covering this story and explaining things to non-hackers.

    Love to see the hackers and cybercriminals screaming like stuck pigs cause the US Government and its’ allies finally acted to stop their criminal money train dead in its tracks.

    The anger of the hackers and criminals in these comments is refreshing and most welcome.

    God Bless America, Spain and Costa Rica for blasting these “enemies of the state” and their minions by surprise … giving them empty zero’s in their pockets.

    • lol @ goverment

      Are you glad that along the war these retards also zeroed out hundreds of thousands of dollars that belonged to legit businesses?

      • Uncle Sam Man

        @lol @ gov’t – Does that justify the hacker/cybercriminals having their fat money? Just because a hacker has kids then he/she shouldn’t be held accountable for his/her crimes???? Get real.

        The stupidity of anarchist “logic” baffles common sense.

        • There is a bus full of children. It gets into an accident. Two are yours, twins in fact, but they are pinned under something heavy — the bench they were sitting on. 28 are not yours. You can safely — but barely — extract your twins but to do so you must let the other 28 children die. Is it right to save the 28 children, or is it right to save your two? Or is it right to shoot the bus driver, who is drunk, and walking away from the bus perfectly fine, with what little time you have left before you have a heart attack or the bus explodes?

        • Hint my question has nothing to do with your comment about hackers having children.

  23. The sense of entitlement displayed by Internet parasites in the Liberty Reserve articles boggles the mind. Their attitude appears to be, how dare the U.S government interfere with our God-given right to pillage anywhere in the world, especially in the USA with its world’s largest economy.

    Here’s why Liberty Reserve was taken down. Not because the USA is trying to run the world, though there are definitely some U.S. politicians who exhibit that character flaw. Not because the U.S. government is trying to have the entire world operate under U.S. law. Not because it cares whether Internet parasites in other countries are making boatloads of cash without paying U.S. taxes.

    It was taken down because it laundered money from the theft of $45 million just a short time ago, via the “siphoning [of] at least $2.8 million from more than 750 Manhattan ATMs in 2.5 hours” (http://www.wired.com/threatlevel/2013/05/eight-charged-in-bank-heist/) via Brian’s cherished money mules. And when the final chapter is written, we will realize that many, if not all, of the thefts of which Brian has written were washed through Liberty Reserve.

    The moral of the story is: commit all the crimes you want to, but if any part of the crime occurs in the USA, the FBI will pay attention.

    • So we can expect Western Union and CitiBank to be shut down soon?

      Because they’ve laundered more money than Liberty Reserve will ever see if it lasted a hundred years.

      Speaking of which:

      Fed Hits Citi Over Money Laundering Problems
      http://www.forbes.com/sites/halahtouryalai/2013/03/26/fed-hits-citi-over-money-laundering-problems/

      All the Fed wants them to do is “improve their procedures”… Right…

      Ever heard of “too big to fail”? How about “too big to prosecure”?

      • I hope voksalna is not listening, but I agree that all large banks should be taken down. If I were president, I would channel my inner Teddy Roosevelt and, starting with the #1 bank in the world, BofA, I would first split them into entities of banks, insurance companies, and casinos. The last two would be cast adrift in the sea of pitiless capitalism, with the first being recapitalized via the FDIC. All salaries would be slashed; if the pampered CEOs did not like that, they could quit — without their golden parachutes, of course.

        • In the real world, THIS is what happens…

          Obama Taps Billionaire Fundraiser Penny Pritzker for Commerce Despite Anti-Labor, Subprime Legacy
          http://www.democracynow.org/2013/5/28/obama_taps_billionaire_fundraiser_penny_pritzker

          The Crown and Pritzker families own and operate Obama. They financed his political career. They are connected to the military-industrial complex and fervent Israel supporters. (which is why the US wants a war with Iran BTW.)

          This is how the US government works. The notion that somehow you can create a government in the real world that does NOT work that way is delusional. History proves otherwise.

          Corporations are the creatures of the state and they have a symbiotic relationship with the state. The rich control the state – this has been true throughout history in every state.

          As we anarchists like to say, “Government IS organized crime.”

          • “This is how the US government works.”

            Anyone who has ever read my blog knows that I believe that Republicans and Democrats should all be sent to prison, with only a few exceptions. Obama is the same as Bush the Younger, who was the same as Clinton, who was the same as …

            But I’d still rather live in the USA than Somalia.

            • Allow me to agree with you about the US political system.

              I’m just recognizing that it goes further than that.

              The fact that the US is “safer” than Somalia (unless you’re black, of course) is a tautology. It makes no logical argument for the necessity of the existence of the state.

              Actually, I’ve gone rather beyond anarchism to what I call “radical Transhumanism”. I recognize now that NO social system is capable of dealing with evolutionarily flawed humans. The issue is deeper than that and can only be resolved by transcending human nature. This is the defining characteristic of Transhumanism: the notion that the only way to solve human problems is to transcend human nature.

              Fortunately technology over the rest of this century should be able to do that.

              In the meantime, the US sinks deeper and deeper into a police state while the poor get poorer and the rich get richer – and the end of that process in history has always been something resembling Somalia.

              So don’t count your chickens before they’re hatched…

              • Very classy and WELL pointed out … keep educationing the unlearned neophytes…

                Quite a thread i must say

        • Read and processed the whole thread and completely agree with Richard.

    • lol @ goverment

      Your logic repulses me. One does not just simply say something this retarded…

  24. Does anyone find it strange that when LR gets taken down for money laundering the principles are looking at 20 years jail yet when UBS, Bank of America and HSBC get busted for money laundering they do not get prosecuted and just get a fine.

    These are banks that were caught out laundering tnes of billions for the Mexican drug cartels who are known mass murderers and Iran as well as other very nefarious characters yet they have NOT been charged…yet Liberty Reserve feels the full brunt of the US legal system?

    Come on guys, wake up and smell the coffee!

  25. With all due respect, I feel that we have to remember this wasn’t exclusive to the criminal “Underweb”. This was regular users of the internet concerned about their privacy (in addition to criminals… but services such as PayPal attract their own criminal element). In addition, wanting to remain anonymous online isn’t a crime, and it isn’t something that only criminals want. I personally am not a criminal, yet I still fight as hard as possible to hide my real identity while online, and if I had known about Liberty Reserve before this came up, I definitely would’ve looked into it as a viable option for online funds. PayPal asks for too much information.

  26. While I am glad this crooked system of Russian Mobsters was taken down, there are many others, that are US owned and in the same league, with the exact same “problem” of criminal money laundering! The question one should ask is:” why is nobody going after the other ones?” My suggestion is: check out if they are clients of lobby firms and you might smell the answer.
    http://www.opensecrets.org/lobby/clientlbs.php?id=D000029829&year=2012

  27. Uncle Sam Man

    To all the complainers and cyber-parasites … pointing your fingers at others won’t help your case. The American banking system is flawed for sure, but that does not excuse the Liberty Reserve mobsters or their customers from prosecution.

    • That isn’t the question. The question is should the criminal actions of a few result in loss for those who did not engage in such actions. And further, is the company itself responsible for those criminals who did use it? If CitiBank is not, then how come LR is?

      In reality, those who are concentrating on the cybercrime uses of LR are those who revel in the “safety” of being “legitimate”, i.e., they are trying to establish themselves as “morally superior” to others for their own emotional reasons.

      So they condemn every user of LR simply because they’re too afraid of being “illegitimate” to seek privacy or anonymity. These are the people who are the first to “join up” with any jingoistic movement. “If you’re too scared to beat ’em, join ’em.”

      Just like there is no “security”, there is no “morality”. It’s a scam sold by those who fear and wish to control everyone else by THEIR rules. This is the essence of government and all other social control systems. And it is fueled by the fear of the average citizen of being out of step with the primate hierarchy.

      Nothing will change this as long as monkeys are running the planet. But as technology marches on, the day when monkeys AREN’T running the planet approaches.

      In the immortal words of Mel Brooks in “Blazing Saddles”, “You watch your ass!” 🙂

      • It is alleged that the company failed to obtain the registration they were legally required to have to operate in Costa Rica, and then pretended to shut down but actually continued operating through shell companies.

        So I don’t think the question of whether the company is responsible for criminals who use it is particularly relevant. If the allegations are true, they’re responsible for operating the company itself illegally.

        • That may be true. But that’s not why the US is involved.

          If this were strictly a Costa Rican issue of being properly registered, I don’t think that would be a major issue. The company would simply register as necessary or move its operations elsewhere.

          Costa Rica is a small country. I’m pretty sure the US is the prime mover behind this seizure and Costa Rica is in no position to refuse the US.

          Robert Vesco found that out years ago.

          • They couldn’t register – the Costa Rican authorities turned them down, several years ago. Instead of choosing to move elsewhere, they (allegedly) chose to continue operating illegally.

            Note that I’m not saying this necessarily justifies the US action. I’m just pointing out that the situation really isn’t comparable to CityBank.

          • Props on the Vesco reference. If it’s true, his attempts to establish a sovereign country is an idea (and dream) I share.

  28. Their customers shouldn’t be inconvenienced because the owners of the site made poor decisions, and not all of their customers made poor decisions. That is a generalization that isn’t true.

    • Uncle Sam Man

      @ Anonymous – READ the article first before you whine:

      If you believe you were a victim of a crime and were defrauded of funds through the use of Liberty Reserve, and you wish to provide information to law enforcement and/or receive notice of future developments in the case or additional information, please contact (888) 238- 0696 or (212) 637-1583.”

      • Absolutely. Those who were only using Liberty Reserve to donate to Mother Teresa’s home for deprived children will eventually receive their funds from the U.S. government.

        • Uncle Sam Man

          Yeah for sure. Hamas and Hizbollah are waiting for their money to be returned as well. Phat chance.

        • Right, sure… You just keep telling yourself that.

          Meanwhile everyone who used the service for legitimate means who tries to recover their funds will end up in the NSA database in Utah as “potential terrorists”.

          Here’s the bottom line: Patriots are suckers. People who believe in “law enforcement” are suckers. People who believe in “the system” are suckers.

          I don’t support criminals who steal from just anyone – as opposed to stealing from those who steal themselves – but applauding ham-handed, legally questionable state seizures is not doing the cause of liberty any favors.

          • Right about that database. And if people think that surveillance of this order doesn’t happen then they definitely know nothing about history, even in their own country — even recent history, to say nothing of McCarthyism and the “red scare”, or godforbid the civil rights movement — and that was possible BEFORE we had the technical capacities we have now.

            I’d no sooner beg the US for my (very legitimate) money back, or even give them my personal information, than I would hijack a plane. Both would probably put me in the same position. The second would probably be less painful than the first, and involve far less red tape. Either would no doubt make me very interesting, regardless of travel restrictions. Shouting will only upset the sheep and should be punished.

            Obligatory Disclaimer: I said I would NOT hijack a plane.

      • “In a press release, the agency didn’t exactly address this question, saying: “If you believe you were a victim of a crime and were defrauded of funds through the use of Liberty Reserve, and you wish to provide information to law enforcement and/or receive notice of future developments in the case or additional information, please contact (888) 238- 0696 or (212) 637-1583.”

        YOU are clearly not reading. The US gov is basically saying ‘if you can help our case, call — we need you to snitch!’ I fail to see where this offers people who were NOT defrauded ANY sort of vehicle or means of recourse (or even DISCOURSE): it is declaring everyone a victim, by fiat, and implying the US gov has the right to say as much, while at the same time declaring they are saving you by doing this very wonderful thing that, oh yeah, will accidentally wipe out a lot of innocent peoples’ money because you’re just too stupid to see you’ve been duped’… when the only people making it impossible to access my money are the very people trying to tell me “you’re safe now!”. It’s also standard boilerplate blah blah.

    • I think it could be argued that buying an e-currency was a poor decision.

  29. Uncle Sam Man

    @ Richard – perhaps you are a nihilist rather than an anarchist. Anyone who disagrees with you is a “sucker” apparently.

    Definition of NIHILISM
    1 a : a viewpoint that traditional values and beliefs are unfounded and that existence is senseless and useless
    b : a doctrine that denies any objective ground of truth and especially of moral truths
    2 a : a doctrine or belief that conditions in the social organization are so bad as to make destruction desirable for its own sake independent of any constructive program or possibility

    • Nope – not a nihilist.

      1 a : a viewpoint that traditional values and beliefs are unfounded and that existence is senseless and useless

      I don’t believe existence is senseless and useless. Quite the opposite. I do believe a lot of traditional values and beliefs are unfounded. That’s almost obvious these days.

      b : a doctrine that denies any objective ground of truth and especially of moral truths

      I believe in reality, if not “moral truths”. I base my belief in non-coercion on economic truths founded in the necessary consequences of the behavior of humans, i.e., an objective basis.

      2 a : a doctrine or belief that conditions in the social organization are so bad as to make destruction desirable for its own sake independent of any constructive program or possibility

      I don’t believe in action “independent of any constructive program”.

      Destruction of the existing system is inevitable based on technological progress. The only question is whether the end result will be the destruction of everyone (or the near equivalent) or just the destruction of the current system.

      OTOH, as long as *I* come out on top of the result, I couldn’t care less. 🙂