Money Laundering through Virtual Currency Provider Shut Down

The U.S. Department of the Treasury has targeted Liberty Reserve S.A. as a financial institution of primary money laundering concern under Section 311 of the USA PATRIOT Act (Section 311). According to Financial Crimes Enforcement Network (FinCEN) press release, Liberty Reserve - a web-based money transfer system or "virtual currency" - is specifically designed and frequently used to facilitate money laundering in cyber space.

Additionally, FINCEN published a regulatory finding explaining the basis of the actions anda notice of proposed rulemaking that, if adopted as a final rule, would prohibit covered U.S. financial institutions from opening or maintaining correspondent or payable-through accounts for foreign banks that are being used to process transactions involving Liberty Reserve.

The regulatory enforcements around virtual currency appear to be increasing. If you have not recently reviewed your regulatory complaince with your counsel, not is a good time to do so.

Topics:  FinCEN, Money Laundering, Patriot Act, U.S. Treasury, Virtual Currency

Published In: Finance & Banking Updates, International Trade Updates, Science, Computers & Technology Updates

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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