Friday 30 September 2022

Liberty Reserve Co-Founder Arthur Budovsky Pleads Guilty

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30 September 2022 - At The Banks - BCCR

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Arthur Budovsky (in courtroom sketch) admitted he knew Liberty Reserve was ‘susceptible’ to criminal use. Photograph: Marilyn Church/Reuters
Arthur Budovsky (in courtroom sketch) admitted he knew Liberty Reserve was ‘susceptible’ to criminal use. Photo: Marilyn Church/Reuters

QCOSTARICA | Arthur Budovsky, the Ukrainian naturalized Costa Rican, the founder of the now defunct notorious cryptocurrency service Liberty Reserve, which operated from Costa Rica, admitted the company was dedicated to money laundering.

Budovsky, 42, pled guilty to one charge of conspiring to run a money laundering service, before the U.S. District Judge Denise L. Cote of the Southern District of New York on Friday.

According to a report by The Guardian, Budovsky admitted he knew Costan Rican-based Liberty Reserve was “susceptible” to be used by criminals, including for Ponzi schemes.  “I knew what I did was illegal,” Budovsky, in blue jail clothing, told US District Judge Denise Cote.

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Budovsky faces up to 20 years in prison. He is scheduled to be sentenced on 6 May.

Liberty Reserve customers were able to open an account anonymously using nothing more than an email address, and unlike Bitcoin it didn’t have a public ledger, meaning it quickly became a haven for thousands of cyber criminals across the world. US prosecutors call it one of the world’s most widely used digital currency services, which was used by criminals involved in hacking, child pornography and drug trafficking.

“After a prior conviction for operating an unlicensed money transmitting business, Budovsky developed Liberty Reserve, incoroporated in Costa Rica, which quickly became a premier service used by criminals around the world to launder their criminal proceeds,” Assistant Attorney General Leslie R. Caldwell said in a statement. “As a result of this global investigation, however, Budovsky was returned to the United States to face justice once again.”

The company was shut down in May 2013 amid US efforts to crack down on the use of digital currencies including bitcoin to evade law enforcement and launder illicit proceeds, involving more than US$6 billion dollars of proceeds from 2006 to 2013.

Four others, Liberty Reserve co-founder, Vladimir Kats, Azzeddine El Amine, Mark Marmilev and Maxim Chukharev, have already pleaded guilty. Marmilev and Chukharev were sentenced to five years and three years in prison, respectively.  Kats and El Amine await sentencing.

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