Liberty Reserve
| Type of business | Sociedad Anónima |
|---|---|
Type of site | E-commerce payment system |
| Founded | 2006 |
| Dissolved | May 2013 |
| Headquarters | Costa Rica |
| Services | Digital currency transfer |
| Launched | 2001 (?) |
| Current status | Inactive (taken offline by regulators) |
Liberty Reserve was a Costa Rica-based centralized digital currency service that billed itself as the "oldest, safest and most popular payment processor, serving millions all around a world". Liberty Reserve was conceived as a "PayPal for the unbanked," allowing the 2.5 billion people without bank accounts or credit histories to participate in the modern economy. The site had over one million users when it was shut down by the United States government. Prosecutors argued that due to lax security, alleged criminal activity largely went undetected, which ultimately led to them seizing the service.
In May 2013, Liberty Reserve was shut down by United States federal prosecutors under the Patriot Act after an investigation by authorities across 17 countries. The United States charged founder Arthur Budovsky and six others with money laundering and operating an unlicensed financial transaction company. Liberty Reserve is alleged to have been used to launder more than $6 billion in criminal proceeds during its history.