Disgraced Liberty Reserve had Vietnam connections

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An image of the Liberty Reserve website in Vietnam that has been shut down following a probe launched against the Costa Rica based entity in the US on money laundering suspicions. 

Online currency exchange Liberty Reserve, which is being probed in the US for allegedly laundering US$6 billion, has links with a website in Vietnam, a VnExpress report says.

A representative from www.libertyreserve.com.vn said on May 29 that the website was an "exchanger" for Liberty Reserve, a digital currency system under investigation in the US, but not its affiliate.

He said the website had accepted money transfers from Liberty Reserve in the US before May 24.

"However, the website in the US has been closed since Friday (May 24) and we ourselves are victims who've lost money," he said.

US authorities Tuesday (May 28) announced the world's "largest" money laundering probe targeting Liberty Reserve.

The Costa Rica-based entity, which handles huge amounts of money outside the control of national governments, is charged with running a "$6 billion money laundering scheme and operating an unlicensed money transmitting business," AFP quoted the US Attorney's office for New York as saying.

Prosecutors said Liberty Reserve processed at least 55 million worth of illegal transactions for at least one million users "and facilitated global criminal conduct."

Involving law enforcement agencies in 17 countries, it is "the largest money laundering prosecution in history," the prosecutor's office said.

Liberty Reserve's principals were arrested Friday in a round-up launched simultaneously in Costa Rica, Spain and New York.

Customers were going to Liberty Reserve's website to buy the online currency known as LRs that could then be used in transactions with other LR users.

The system was not registered with US authorities and unlike some other non-state currency systems did not require proof of identity for users.

Adding another important layer of anonymity, Liberty required customers to buy or sell their LRs via third party exchangers, meaning that there was no direct link between a customer's traditional bank account and Liberty's system.

An extra service would allow a user to hide "his own Liberty Reserve account number when transferring funds, effectively making the transfer completely untraceable, even within Liberty Reserve's already opaque system."

The system was tailor-made for criminal transactions and money-laundering, facilitating "a broad range of online criminal activity, including credit card fraud, identity theft, investment fraud, computer hacking, child pornography, and narcotics trafficking," the AFP quoted the indictment as saying.

Soon after Liberty Reserve's website abroad closed, the one in Vietnam shot down as well.

In a statement before closing, the Vietnamese-language website said: "We are all victims of the recent incident"¦ Every transaction is not available, including among Vietnamese banks."

Earlier, it introduced the same virtual currency called "LR" and said it would allows transactions through four local banks - Vietcombank, Vietinbank, Dong A and A Chau.

The website was launched last year and its oldest post is dated November 2012.

VnExpress quoted an unnamed expert in money laundering as saying that the owners of this website may open normal accounts at local banks to make the transactions.

"The [virtual currency] LR is not considered a foreign currency in Vietnam. It's necessary to clarify if this website belongs to a money exchanger," he said.

Ngo Ngoc Dong, General Director of Vietnam National Financial Switching Joint Stock Company, which holds shares in seven major banks in Vietnam, said his company has no activities involving Liberty Reserve.

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