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Liberty Reserve: Down, gone, shut down?

Website merely under maintenance? Entirely gone? Or shut down by the government? These are the questions owners of Liberty Reserve accounts are asking, now that the official site is currently inaccessible.

As of this writing, Liberty Reserve’s official site ( shows a “Webpage Not Available” error — which could mean that the site may have been taken down or shut down.

What is Liberty Reserve?

Liberty Reserve is an online currency or digital payment processor used by customers to send and receive funds anonymously on the internet. It is a company incorporated and operated in Costa Rica since 2002 that allows customers to facilitate online transactions, including payment of goods and services and personal exchanges or fund transfers.

Unlike Paypal, another global payment processor, Liberty Reserve payments cannot be reversed. What also attracted users to Liberty Reserve is the anonymity and privacy offered to users.

Any user, for example, can sign up for and use a Liberty Reserve account without having to verify identity, submit identification cards, or link to a bank account. Users can also use any name (fictitious or otherwise) when signing up. Multiple accounts by the same user are allowed. In addition, Liberty Reserve offers a private payment option that hides one’s account number when making a payment.

Down, gone, shut down? 

In the past, site maintenance concerns that make Liberty Reserve’s website inaccessible are usually announced to the public days ahead, but in this recent case, there was no official announcement from the owners of the digital currency.

Rumors about Liberty Reserve being shut down by the government intensified when news reports emerged saying one of the owners of the payment processor was arrested.

News article: Costa Rican arrested in Spain for alleged financial crimes

A newspaper in Costa Rica reported on May 24, 2013 that one of the owners of Liberty Reserve was arrested on the charge of money laundering. According to the article, Arthur Budovsky Belanchuk has been under investigation since 2011 for money laundering primarily due to his participation in the Liberty Reserve company.

An excerpt of the news article is shown below:

Arthur Budovsky Belanchuk, 39, on Friday was arrested in Spain as part of a money laundering investigation performed jointly by police agencies in the United States and Costa Rica.

Costa Rican prosecutor José Pablo González said Budovsky, a Costa Rican citizen of Ukrainian origin, has been under investigation since 2011 for money laundering using a company he created in the country called Liberty Reserve.

Local investigations began after a request from a prosecutor’s office in New York. On Friday, San José prosecutors conducted raids in Budovsky’s house and offices in Escazá, Santa Ana, southwest of San José, and in the province of Heredia, north of the capital.

Budovsky’s businesses in Costa Rica apparently were financed by using money from child pornography websites and drug trafficking.

New York conviction

According to records from the U.S. Justice Department, on July 27, 2006, Budovsky and a partner identified as Vladimir Kats were indicted by the state of New York on charges of operating an illegal financial business, GoldAge Inc., from their Brooklyn apartments.

They had transmitted at least $30 million to digital currency accounts worldwide since beginning operations in 2002.

The digital currency exchange, GoldAge, received and transmitted $4 million between Jan. 1, 2006, and June 30, 2006, as part of the money laundering scheme.

Budovsky and Kats were sentenced to five years in prison for engaging in the business of transmitting money without a license, a felony violation of state banking law, but got probation.

Is Liberty Reserve coming back?

Will the Liberty Reserve website be back again? No one knows. Aside from the news article above, there are no official announcements yet from other sources. This reminds us of another payment currency, e-Gold, that was also closed by the U.S. government in 2007 due to allegations of money laundering.

Will customers get their Liberty Reserve funds back? Again, no one knows. In the case of e-Gold, the website reopened in 2010 to allow clients to file for a refund claim. Those with remaining funds were asked to validate their accounts and submit an official claim request, to be approved by an appointed agency of the U.S. government. Will the same happen for Liberty Reserve? We’ll have to wait.

For now, customers can only hope that this is not the end yet of Liberty Reserve because if it is, then it might mean saying goodbye to all or a portion of their Liberty Reserve funds.

News source: Tico Times

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