Liberty Reserve, the leading payment channel for traders in emerging and frontier markets, has come under fire and the firm has been taken out of operation, according to a report in the Tico Times. As reported, the owner of the South American based company has been arrested by authorities in Spain in alleged connection with serious financial crimes.
It is believed that Arthur Budovsky Belanchuk (39), owner of the popular Liberty Reserve, was arrested on Friday 24th of May in Spain as part of an international operation spearheaded by the United States and Costa Rican governments on financial crime. Mr. Belanchuk, a Costa Rican citizen of Ukranian origin, was under investigation since 2011 after authorities flagged his firm for money laundering. Apart from financial and general e-commerce, it is thought by the investigators that the company engages in illicit payments from criminal activity such as child pornography and drug trafficking.
Forex brokers have been benefiting from Liberty Reserve’s vast access as a payment provider, especially in countries where traders face difficulties in transferring funds. “Liberty Reserve was a ‘gift’ for several traders, especially after the State Banks’ (State Bank of Pakistan) changed to international money transfers”, said Masroor Ghoori an introducing broker and analyst from Karachi, Pakistan, in a comment to Forex Magnates. Liberty Reserve is a payment channel whereby people can send and receive secure payments without revealing their account numbers or identities.
Forex brokers operating from heavily regulated markets such as the UK are obliged to use payment channels that are regulated, for example UK brokers use services provided by the likes of Money Bookers. Liberty Reserve (LR) is used by several international forex brokers, such as Marketiva, FXOpen, Markets, Instaforex and others.
Liberty Reserve has been widely used by traders where central banks restrict bank transfers to foreign entities; for example in countries such as Malaysia, Pakistan, Argentina, Nigeria and Brazil the company has been the preferred payment method. The service offers traders a fast and cost effective method with charges capped at $2.99.Liberty Reserve’s website has been shut down and none of their international representatives in India or Malaysia were reachable for comment.Dery Rusdan one of the largest introducing brokers in Indonesia said in a comment to Forex Magnates: “We always thought that Liberty Reserve could have issues like e-gold but this was a shock, business will suffer.”
A Dubai based brokerage firm who wished to remain anonymous told us: “We average around $250,000 to half a million in monthly deposits, mainly from Asia and Africa.
Forex traders have faced issues with payment providers in the past, like with e-gold, a digital currency provider that was found guilty of money launder by US authorities”.
Forex traders have faced issues with payment providers in the past, like with e-gold, a digital currency provider that was found guilty of money launder by US authorities”.
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In the end provider of financial systems such as liberty reserve on this internet seems to find the end point. there is little personal experience that I had just experienced last Thursday may 23-2013 wherein the same time my account hacked by an account calling itself (SOL) U5124662.
ReplyDeleteThere is confusion in the account after surfing the internet and found that the account has a lot of piracy activities against other LibertyReserve account, where I can find it by googling on google with the same story as I experienced.
I’m not accusing but based on the rules specified by the customer service and rules which seem irrelevant to mention that every transaction can not be returned or suspended when an error occurs, it is very disturbing and tends to weaken the client side, even though at that time I was asked to immediately freeze the transaction through chat with customer service in order to take early action in anticipation and then conduct an investigation through the abuse department.
My suspicion was mounting an email reply which answers 48 hours promised not forthcoming while no clarity will return the money or the piracy problem like this. How could anyone trust a financial institution with a service system is so weak as this in terms of keeping customer service, if only because the transaction positivenya is instant speed, but ultimately backfired for customers, especially for countries that are still a lot and do not use the system relevant in terms of protection of their computer systems.
A final thought possible Libertyreserve conspiracy to create an account hijacker as mentioned earlier to control the rotation of its e-currency randomly programmed to piracy and organized the schedule ter certain countries, because before this news dropped, in Indonesia had been rife and aggressively once this piracy. Imagine a retail trader can make a deal LR $ 100 – 1K / day for himself. and what about the money now?! broker may want to convert to other methods of payment for deposit them later. greetings and be careful