Liberty Reserve bust sees Vietnam depositors, exchangers lose thousands

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One of the offices raided by police in Costa Rica for having ties with Liberty Reserve, a company accused by the US of money laundering more than US$6 billion Photo: AFP

Many people in Vietnam have reportedly lost money after digital money network Liberty Reserve was shut down for a probe into money laundering in the US.

On online forums, individuals reported losing thousands of dollars, while "exchangers" -- the middlemen through whom everyone had to buy or sell the virtual currency Liberty Reserves (LR) -- are thought to have lost even more.

"The currency is estimated to make up 30-40 percent of the online money market," Tuoi Tre (Youth) newspaper quoted a person identified only as D, who claimed to have lost 1,000 LRs, equivalent to US$1,000, as saying.

He said LRs were preferred by many people in Vietnam because it does not have stringent requirements about personal information or limits on transaction amounts like PayPal.

People could also sell LRs for a profit, he added.

Exchangers have suffered more serious losses because many had thousands of LRs in their account.

In Vietnam exchangers included websites like, and


It is unlikely that anyone will receive compensation.

A State Bank of Vietnam (SBV) official said LR exchangers were not registered and thus illegal.

"People doing transactions through these exchangers cannot get back their money because there is insufficient evidence [for the transactions] and the exchangers cannot be traced," he said.

The SBV is drafting regulations for online trading, including virtual currency exchange, he added.

The use of virtual money is illegal in Vietnam.

Last month Liberty Reserve was shut down by US federal prosecutors after an investigation by authorities IN 17 countries.

The Costa Rica-based entity's founder Arthur Budovsky and six others were charged with money laundering and operating an unlicensed financial transaction company which have allegedly been used to launder more than $6 billion in criminal proceeds.

Following this Vietnamese money exchanger shut down and claimed it was only an "exchanger" for Liberty Reserve and not an affiliate. But it has a similar interface as the one in Costa Rica.

It introduced "LR" and said it would allow transactions through four local banks - Vietcombank, Vietinbank, Dong A, and ACB.

The banks have denied any connection with Liberty Reserve.

But the central bank has instructed them to make a full report and review their clients' transactions to see if there is any connection with Liberty Reserve.

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