LIBERTY RESERVE STORY OF COLLAPSE

Updated: 05/28/2013 17:28
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The problems and gossips around the popular and wellknown ecurrency payment system Liberty Reserve have been spreading around within last 4 days. We...

The problems and gossips around the popular and well-known e-currency payment system Liberty Reserve have been spreading around within last 4 days. We have already published the news about the Liberty Reserve shutdown on Sunday. As of now the problem went far beyond the HYIP industry. The news has been published on the biggest news portals such as: BBC, International Business Times, Guardian many others. Today i would like to draw your attention to some history facts that may possibly reveal some facts from the past of Mr. Budovsky and the way he interacted with legal authorities in the past.

 

Arthur Budovsky and his companion Vladimir Katz have already been under the pressure of U.S. financial authorities for being involved in tax payment covering up and money laundering far in early 2000s. At that time these two guys have offered a "perfect" alternative for businessmen, who got the chance to convert easily the real funds tracked to some units of exchange thanks to GoldAxe exchange, owned by Budovsky and Katz. Both have been sentenced and left the U.S. to go on working without the pressure of financial institutions beyond the U.S. borders.

 

Arthur chooses loyal at that time, from the point of view of control on funds management republic - Costa Rica. Another longterm and rather successful business is launched here in 2002 - Liberty Reserve. The system, Budovsky organized, doesn't come with any definition of financial campaign. It hasn't any official property, however none of the sides cares about such a "suspicious organization, for the time being. The matter is that thanks to anonymity and low commission fees for making the transfers and being supported by a number of exchange services, Liberty Reserve soon becomes one of largest payment processors, with the popularity raising both from ordinary customers and from the official authorities accordingly, including FBI and IRS. The system has become an ideal for shadow operations, including HYIP transactions, child pornography, carding, phishing money laundering, illegal gambling and things like that.

 

Being an evident leader on gray market Liberty Reserve suddenly starts to block customers' wallets. Unreasonably, without any proper explanation... Hundreds of accounts are being affected, no matter they are empty or with millions of dollars on balances. The outrage goes on for weeks, support gives no clear explanation: first saying about some phishing, then they go on with the script error, then proceed with website maintenance. Gradually most of accounts are unlocked, however, bad feeling remains!

 

The U.S. legal authorities make up another campaign to bring the owners of Liberty Reserve to responsibility. U.S. prosecutor's office sends request to Costa Rica and after getting the support from local colleagues it announces the forced bankruptcy of Liberty Reserve on March 29, 2013. The company Liberty Reserve S.A. is officially closed. Back again, no one cares about this "little" problem. Well, the customers got used to the website of Liberty Reserve to go offline for some days, several times within last year or two. All in all, the fact Liberty Reserve website went offline on Friday didn't raise much worries at all...

 

The news about Arthur being en-jailed was a surprise for all. Arthur Budovsky has been arrested in Spain. Local police seeks through the properties in Costa-Rica, panic rises, Internet sources start to show signs of alarm. At first no-one even noticed that 'libertyreserve.com' domain was moved to sinkhole and blocked from changing DNS. Sinkhole system is being operated by FBI and CIA. Later on there also appeared some reports that some biggest exchangers are locked in the U.S. in the similar way. See the video news report in Spanish about the arrest of Arthur Budovsky.

 

 

So, let's talk about the consequences. Apart from evident losses for end customers, there are also sad predictions concerning the fate of other anonymous payment systems. The sad perspective will obviously touch upon ordinary HYIP investors, cause after the Liberty Reserve shutdown the Scam-fall of HYIP programs has already begun! Well, obvious reason for the scam-fall is loss of funds stored on Liberty Reserve accounts by HYIP admins and as the result inability to make payments on current deposits.

 

Despite all that there's a positive thing about it. The industry will eventually recover from temporal collapse, just like it happened after the story with Evocash and Egold, no matter how long it will take, it will happen. Everything that was working before will be transformed into something new, something even more interesting for both parties. Very much likely such a case study will contribute to appearing of new payment systems, which are supposed to be controlled. No matter what happens anyway, be cautious, read official news, don't spread panic and keep in touch with HYIPNews.com.

 


About the author

Eric Marriam is a young writer. Even though he is not experienced he is able to make really high quality work. Eric is able to identify a problem people have and break it down, able to appeal to emotion through emotive writing, can change style of writing to cater to different audience. Eric Marriam is able to work creatively and effectively with staff and managers and despite his young age, he proved to be a clear and effective writer and speaker, committed to maintaining quality and efficiency, seeking for professional growth and development.
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