Money-launderers turn to Perfect-Money following Liberty Reserve’s not so gracious exit.
Mysterious narratives and whispered hypotheses have funny ways of revealing themselves when the proverbial plot thickens. Towards the end of May, the arrest of Arthur Budovsky Belanchuk, owner of, digital currency service, Liberty Reserve, uncovered the growing trend of digital currency platforms being used for money laundering. In brief, without the requirement of identities or account numbers, by the nature of the business, it helped to facilitate a stress-free and undetected flow of illegally generated income for financial-criminals worldwide. It was also facilitating Forex brokers operating from unregulated markets for which the notorious Liberty Reserve was described as a “gift” by Masroor Ghoori, a broker and analyst from Karachi, Pakistan in a comment to Forex Magnates.
Not a month later, once authorities had been roused to attention by the drama, Payment Magnates wrote about another suspicious sort within the payment game. Perfect-Money, an online, digital currency provider had made an interesting announcement, following Liberty Reserve’s fall from grace, stating that it was going to stop accepting US customers. It also moved its domain name from Panama to Iceland where it became Perfectmoney.IS – a detail that Payment Magnates observed as being: “[steps] to avoid trouble with the US authorities.”
Further information, recently revealed, indicates that Perfect-Money has become Liberty Reserve’s replacement as a platform for money-laundering and other such cyber-crime. Even-though its website states that identity checks are performed, Idan Aharoni, the head of Cyber Intelligence at EMC Corp's RSA security division, said that Perfect Money's digital currency is being used to launder money and conceal profits. And, according to assistant professor at Southern Methodist University, Tyler Moore, in a statement he made to Reuters: “Perfect Money seems to be a very popular choice among [criminals]." He explains that 70% of websites connected to Perfect Money were concluded to be Ponzi Schemes.
It is important to note, however, that there are many digital currency platforms that with or without awareness or intent, create the same opportunities for seedy opportunists; given the freedom and anonymity of these companies. Bitcoin is also a vulnerable hot-spot for criminal activity and is used for exactly that but, unlike Liberty Reserve and Perfect Money, Bitcoin is controlled by computer algorithms and works on a peer-to-peer system, rather than, from a centralized organisation, which does change things – in terms of who can held accountable.
But blame aside, the story is frightening and affirms all calls for Regulation . On the other hand, why should our fun constantly be spoiled but schoolyard bullies who can not play by the rules?
Image courtesy of Flickr
