Alternative Currencies Under Threat

U.S. accuses currency exchange of laundering $6 billion


U.S. prosecutors have filed an indictment against the operators of digital currency exchange Liberty Reserve, accusing the Costa Rica-based company of helping criminals around the world launder more than $6 billion in illicit funds linked to everything from child pornography to software for hacking into banks.
The indictment unsealed on Tuesday said Liberty Reserve had more than a million users worldwide, including at least 200,000 in the United States, and virtually all of its business was related to suspected criminal activity.

U.S. Attorney Preet Bharara called the case perhaps "the largest international money laundering case ever brought by the United States."

"Liberty Reserve has emerged as one of the principal means by which cyber-criminals around the world distribute, store and launder the proceeds of their illegal activity," according to the indictment filed in U.S. District Court for the Southern District of New York.

Officials said authorities in Spain, Costa Rica and New York arrested five people on Friday, including the company's founder, Arthur Budovsky, and seized bank accounts and Internet domains associated with Liberty Reserve.

 Tech blogger Brian Krebs, a former Washington Post reporter who now runs the blog Krebs On Security, wrote on Tuesday "the action against Liberty Reserve is part of a larger effort by the U.S. government to put pressure on virtual currencies."
Treasury Undersecretary for Terrorism and Financial Intelligence David S. Cohen told a press conference it was a response to a specific abuse of the financial system. "I want to make clear that today's action does not mean that we are trying to eliminate virtual currencies and their providers," he said.
On Tuesday, the company's website, www.libertyreserve.com, displayed the message: "This domain name has been seized by the United States Global Illicit Financial Team."

 My view:

Look beyond the propaganda - the US government is facing mounting pressure due to dollar debasement from alternative currencies. 

Russia and other BRIC countries are less than thrilled with American fiscal irresponsibility that is supported by US dollar dominance post WW2 and are looking for more reliable currencies. 

Will digital currencies partially fill the void?

Certainly gold has faced strong headwinds over the past 18 months despite strong physical buying by central banks in Russia, China and Turkey.

With rising treasury yields, will dollar based bonds start to lose their appeal?

And most importantly, are these actions indicative of a desperate empire trying to hold everyone hostage by maintaining a US dollar world reserve currency instead of competing currencies?





Comments

  1. Jct: Notice it's always the Liberty crew who made their money to look like the real thing, or the Bitcoin Boys with their stupid units speculated up to the belief that "wasted-computer-time-mining" is worth something, used to bring down the government wrath on all alternate currencies including the good ones, LETS time-based currencies. Fortunately, they're trading mobile-phone minutes in Africa so there's no stopping them from costing the banksters their vigorish by not using their bank money.

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