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Crime The Almighty Buck United States

Internet Payment Processor Liberty Reserve Accused of Laundering $6 Billion 205

Posted by Soulskill
from the go-big-or-go-home dept.
pdclarry writes with a followup to this weekend's story that Liberty Reserve, a huge international payment processor, had been shut down and its founder had been arrested. "Liberty Reserve, apparently the Internet bank of choice for criminals, as reported by the NY Times, Wired and Business Week, has been accused of laundering over $6 billion dollars. Incorporated in Costa Rica in 2006, Liberty Reserve allegedly 'facilitated global criminal conduct' and was created and structured 'as a criminal business venture, one designed to help criminals conduct illegal transactions and launder the proceeds of their crimes,' Manhattan U.S. Attorney Preet Bharara said in an indictment (PDF) unsealed today. Chatter on criminal web sites show a rising sense of panic as fortunes have disappeared in an instant."
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Internet Payment Processor Liberty Reserve Accused of Laundering $6 Billion

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  • by maliqua (1316471) on Tuesday May 28, 2013 @07:26PM (#43845541)
    that HSBC may have laundered..
    • by thesupraman (179040) on Tuesday May 28, 2013 @07:30PM (#43845569)

      I believe its called 'too big to fail'
      Also known as 'the people in power keep their money there'

      • Re: (Score:2, Interesting)

        by Anonymous Coward

        I believe its called 'too big to fail'
        Also known as 'the people in power keep their money there'

        Also known as a bunch of douchebagels who manipulate the market and come whining to the government for handouts when someone calls them out.

        • by Taco Cowboy (5327) on Tuesday May 28, 2013 @08:23PM (#43845891) Journal

          Liberty Reserve may have laundered 6 Billion, HSBC may have laundered 300 trillion, but all in all, what does that all mean ?

          How come governments can "create" new money out of thin air, trillions at a time, and it's all legal, but when Joe-on-the-street did some side jobs and made some money out of it and does not want it to be taxed, they call it "money laundering" ?

          It's all about control, it's all about TPTB exerting their control over us

          It's a case of the Great Leader can do everything they want to (even to the point of supplying weapons to some groups of seedy people to fight/kill/murder other groups of seedy people) but you, the Joe-on-the-street, don't get to do anything you want because you just ain't nobody

          • Re: (Score:2, Informative)

            by Anonymous Coward

            They never "create" money. The Fed increases the money supply through Mx. Which has a proportional affect on inflation.

            • I do not believe that the Fed increasing the money supply results in inflation and here's why. How do we know how much money OUGHT to be in the system at any given time? There are literally billions of people trying to join the economy and get paid wages that will permit them to buy modern conveniences and a higher standard of living. Without more money, they will not be able to do that. The price of a computer chip is related to not just demand , but also the real cost (indebtedness) AMD , say, has incurre

          • by Xeranar (2029624) on Tuesday May 28, 2013 @09:26PM (#43846287)

            Idiots who don't understand fiat currency make me sad. Basically we dillute the money supply as a proportion of the GDP. In other words we base our money off of our collective labor rather than some arbitrary metal we deem rare enough to care about.

            • by Arker (91948) on Tuesday May 28, 2013 @09:51PM (#43846443) Homepage

              You must make yourself very sad.

              "We" dont do any of this. A cabal of the best connected and wealthiest bankers in the country do it, in private, as they see fit, and we get no say. When they inflate the currency, they dont create new value - they just suck some of the value out of the old currency. And then they get to spend the new currency. Great scam. Of course they try to restrain their greed enough to keep the inflation at a level where the increase in GDP can mask it - they dont want to be set on with torches and pitchforks any more than anyone else does.

              • by ShanghaiBill (739463) * on Tuesday May 28, 2013 @11:09PM (#43846895)

                "We" dont do any of this. A cabal of the best connected and wealthiest bankers in the country do it

                Do you understand that banker are creditors, who benefit from a strong currency? So if their unenlightened self interest is the opposite of what they are doing, why are they doing it? Maybe because they (along with 99% of all economists) believe that we all benefit from expansionary monetary policy during recessions?

                When they inflate the currency, they dont create new value - they just suck some of the value out of the old currency.

                Except that inflation is near record lows, despite trillions in new money. When unemployment is at 10% and factory utilization is below 80%, there is plenty of slack for "new money" to create real value by putting labor and capital to work.

                Of course they try to restrain their greed ...

                Could you please explain how a creditor diluting the currency can be considered "greedy"? You might want to read some history books. In the past the conspiracy nuts were accusing the bankers of suppressing the "common man" by doing the exact opposite of what they are doing today. The most eloquent expression of this was the Cross of Gold [wikipedia.org] speech by William Jennings Bryan.

                • Re: (Score:2, Insightful)

                  by Anonymous Coward

                  ... banks are creditors. FTFY.

                  Bankers just want to see money circulate so that they can take a cut. The bank will never collapse, you see, because the government will bail the bank out.

                  Diluting the currency is greedy when the low-interest loans (i.e. used as leverage) are invested in bubbles such as housing, stocks, commodities, currency arbitrage. These things make the value of assets increase, so the rich get richer and the poor find it harder to get out of poverty (must continue to rent instead of b

                • by Arker (91948) on Tuesday May 28, 2013 @11:50PM (#43847087) Homepage

                  Do you understand that banker are creditors, who benefit from a strong currency? So if their unenlightened self interest is the opposite of what they are doing, why are they doing it?

                  Over the past 20 years the currency supply as estimated by the Fed themselves has gone from $400 billion to $3,000 billion dollars - a gain of $2,600 billion. That means 6.5 times more US currency than *existed* 20 years ago has been *added* to the supply since then, and that's *net* so gross numbers would be even bigger. That's a pretty huge slice of 'pie' even for the richest men on the planet. In the meantime the devaluing aspect that pays for this windfall is spread out evenly among everyone holding US dollars, while the enriching portion hits you alone, so you are taking a relatively small hit for a relatively large return. In sum, your thesis that this is against their self interest is simply ill-founded. Particularly considering that what matters to the very rich is not actual value (since they have more than they could need already) but rather proportional value (since this is the aspect of money that brings power, and at that level money really is only a tool for acquiring power.)

                  Except that inflation is near record lows, despite trillions in new money. When unemployment is at 10% and factory utilization is below 80%, there is plenty of slack for "new money" to create real value by putting labor and capital to work.

                  Except that your numbers are heavily massaged for propaganda purposes and dont actually resemble reality. Unemployment numbers only count people that lost their jobs recently (the chronically unemployed become invisible this way) and only people that have no work at all (so people that lose good jobs and have them 'replaced' with minimum wage jobs that they cannot live on dont count as unemployed either.) 'Our' factory utilisation is low because 'we' are busy moving those jobs overseas.

                  Bryant, for all his flaws and mistakes, was advocating a bimetallic monetary standard, not fiat currency, and your citation of him seems a bit gratuitous.

                  • Re: (Score:3, Insightful)

                    by ahabswhale (1189519)

                    Money supply is largely irrelevant. What matters is inflation and there's very little of it. I could go into why that is but there's no point in arguing with conspiracy theorists. Nice try for another world conspiracy though. You clearly have no understanding how currency is valued.

                    • by Arker (91948)
                      Nice contentless reply. You dont understand inflation, you dont understand how the numbers are massaged, and you couldnt even begin to explain the relationship between currency and value. But you can call me a conspiracy theorist, that should shut me up, right? Never mind that it makes no sense at all. Wave your hands and run away.
                    • Actually, I do understand inflation. You're the one who seems to have no fucking clue what it actually is.

                    • I haven't seen you demonstrate anything either.

                    • by Arker (91948)

                      If you think I think I 'have it all figured out' you are wrong. One thing I am very sure of is that the economy is more complex than any economists model of it.

                      This is one of the reasons why relying on central control doesnt work. Even if conflicts of interest and corruption werent issues centralised control of an economy still wont work because of calculation problems.

                    • by Politburo (640618)
                      This is not factual. Yes, I know.. the guy who sells alternate statistics insists it is true and he couldn't possibly have an ulterior motive.
                  • Over the past 20 years the currency supply as estimated by the Fed themselves has gone from $400 billion to $3,000 billion dollars - a gain of $2,600 billion.

                    You don't know what you are talking about. The Fed did not print all that money. It's the so called M2 type of money that has grown so rapidly. Please, educate yourself a little bit [khanacademy.org] before you start spewing fire all over the internet about it.

                  • by bLanark (123342)

                    Except that your numbers are heavily massaged for propaganda purposes and dont (sic) actually resemble reality.

                    What kind of country has a population so stupid they can't keep tabs on inflation via the cost of a basket of goods?

                    I like the way you glid over the inflation argument, the strongest argument (for me) in your parent post. You could maybe make it in politics. But not in Europe.

                  • by bLanark (123342)

                    Sorry, I had to amend your bad grammar. When you post on the internet, it is forever. Please take care in future. And, finally, to outrage you, it's not your language. (But the grammar was bad by your own rules..)

                    ( Expect to lose karma, it's worth it to make a point, ) #StupidOverThere

                    • by Arker (91948)
                      Hey, guess what? The 'error' you spotted and 'corrected' is not one of grammar. It's a matter of orthography. I wont even bother going into why it's not actually an error - you couldnt even get the basic subject matter correct.
                    • by cusco (717999)
                      won't
                      couldn't
                  • Over the past 20 years the currency supply as estimated by the Fed themselves has gone from $400 billion to $3,000 billion dollars - a gain of $2,600 billion. That means 6.5 times more US currency than *existed* 20 years ago has been *added* to the supply since then, and that's *net* so gross numbers would be even bigger.

                    As long as the value produced by the country in question increased by the same ratio, there is no problem. You are working on the assumption that the increased science, increased technology, increased production of goods, increased production of ideas, concepts, arts, literature and all the rest; that all those things that have increased that give a currency its value in the world; that those things have not kept pace with the increased amount of bills floating around. Perhaps you're right, but I get the i

                  • by Politburo (640618)
                    If you are looking for a job, you are statistically unemployed. That's the only criteria.

                    Length of unemployment and receipt of unemployment benefits are irrelevant. While those moving to lower paying jobs are counted as employed (pretty hard to argue otherwise), any reduction in pay gets reflected in wage data.
                • Wow, that's confused (Score:2, Informative)

                  by Anonymous Coward

                  "Do you understand that banker are creditors, who benefit from a strong currency?"
                  They don't care, they lend in dollars and receive dollars, not lend in dollars and receive euros. They don't benefit from a strong dollar, they benefit from receiving more dollars.

                  "Except that inflation is near record lows, despite trillions in new money."
                  Implosion + Explosion = zero
                  Without the money printing, the economy is contracting. People who made successful things should be getting richer as the dollar increases, but in

                • by drinkypoo (153816)

                  Do you understand that banker are creditors, who benefit from a strong currency? So if their unenlightened self interest is the opposite of what they are doing, why are they doing it?

                  Because they convert the money to other currencies, then cause the dollar to fall, then convert it back, then dump it into some investment on which they don't have to pay taxes.

                  If you have any other questions with obvious answers, I'll be here for you.

                • Do you understand that banker are creditors, who benefit from a strong currency? So if their unenlightened self interest is the opposite of what they are doing, why are they doing it? Maybe because they (along with 99% of all economists) believe that we all benefit from expansionary monetary policy during recessions?

                  Banks are international. They play one country's currency against another, and there is no reason to keep the US dollar level with the other currencies. One day they may decide to "cash in"

                • by cusco (717999)
                  Bryan must have been an amazing speaker. AFAIK, he was wrong on just about every topic that he lectured on except for 'trust busting', and still managed to convince thousands of people (many of whom should have known better.) He actually won the Scopes 'Monkey Trial', in spite of being wrong in almost every aspect of his argument.
              • "We" dont do any of this. A cabal of the best connected and wealthiest bankers in the country do it, in private, as they see fit, and we get no say.

                Only true if that cabal decides to reduce the money supply, not increase it.

                We have to spend it for it to work. We're not. That's why despite unprecedented monetary expansion we are not seeing inflation at the moment. The money is sitting in vaults (well, technically it's mostly numbers on computers, but...), it's not moving, and so virtually everything is a

                • Re: (Score:3, Informative)

                  by tlhIngan (30335)

                  We have to spend it for it to work. We're not. That's why despite unprecedented monetary expansion we are not seeing inflation at the moment. The money is sitting in vaults (well, technically it's mostly numbers on computers, but...), it's not moving, and so virtually everything is at a standstill and will remain so unless someone figures out a way to get that money into people's hands and then out of those hands into other hands.

                  That is a huge problem with deflationary economies - when something that cost

                • by lgw (121541)

                  Instead, by and large, most people are using what money they have to pay off mortgages and settle other debts.

                  Yeah, but that's quite important in the long term. We had moved to accepting insane levels of debt as "normal", but that just wasn't sustainable. We're moving to a more reasonable (but still quite high) level of consumer debt as "the new normal": painful, but we had to. It's a necessary (but not sufficient) step to climbing out of recession.

                  Hopefully this will put us in a more realistic mindset about the US federal debt, which is up to $148,000 per taxpayer now. I'm not sure what can be done about that,

              • Talking heads quote the real GDP which is calculated using the CPI. If CPI is lower than reality then real GDP will be overstated.

            • Re: (Score:2, Insightful)

              by pla (258480)

              In other words we base our money off of our collective labor rather than some arbitrary metal we deem rare enough to care about.

              Damn, I've never seen it put quite so eloquently! So as the GDP grows, the value of each "share" of that decreases accordingly. Though at the same time, the proportion of shares going to the rich keeps increasing. Hmm...

              I can't really think of many better arguments for investing in metals (or hell, vintage Garbage Pail Kids cards for that matter! Just about anything but US Do

            • by Zemran (3101)

              I had a Fiat once, total crap.

              • by mjwx (966435)

                I had a Fiat once, total crap.

                Fix It Again Tony.

                I much prefer the Gold(wing) standard

            • by X.25 (255792)

              Idiots who don't understand fiat currency make me sad. Basically we dillute the money supply as a proportion of the GDP. In other words we base our money off of our collective labor rather than some arbitrary metal we deem rare enough to care about.

              Hahahaha. No wonder they keep printing money, when common Joe believes in what you just said.

    • by anagama (611277) <obamaisaneocon@nothingchanged.org> on Tuesday May 28, 2013 @07:33PM (#43845595) Homepage

      Came here to make an HSBC quip.

      Although Matt Taibi has it at 10 Billion, his description of the settlement with HSBC is sadly hilarious:

      Wow. So the executives who spent a decade laundering billions of dollars will have to partially defer their bonuses during the five-year deferred prosecution agreement? Are you fucking kidding me? That's the punishment? The government's negotiators couldn't hold firm on forcing HSBC officials to completely wait to receive their ill-gotten bonuses? They had to settle on making them "partially" wait? Every honest prosecutor in America has to be puking his guts out at such bargaining tactics. What was the Justice Department's opening offer -- asking executives to restrict their Caribbean vacation time to nine weeks a year?

      http://www.rollingstone.com/politics/blogs/taibblog/outrageous-hsbc-settlement-proves-the-drug-war-is-a-joke-20121213 [rollingstone.com]

      Anyway, one thing is clear. Liberty Reserve didn't donate enough to Obama's campaign to get a slap on the wrist and and a cabinet post.

      • by dkleinsc (563838) on Tuesday May 28, 2013 @08:05PM (#43845777) Homepage

        Anyway, one thing is clear. Liberty Reserve didn't donate enough to Obama's campaign to get a slap on the wrist and and a cabinet post.

        I don't think that's the issue here: According to opensecrets.org, in the 2012 cycle, HSBC gave only about $30K to Obama and $23K to Romney. By comparison, Goldman Sachs spent about $8 million on lobbying and "donations" (a.k.a. bribes). So I don't think HSBC bought them off at the highest level, I think they might have simply offered some extremely well-paid and cushy jobs to the bureaucrats investigating their crimes to convince them that they couldn't find specific wrongdoing on the part of specific people.

        But put me in the camp that says that both HSBC execs and Liberty Reserve execs should probably be in jail for this. Or even better, you might take George Carlin's advice:

        And you know, in this country, now there are alot of people who want to expand the death penalty to include drug dealers. This is really stupid. Drug dealers aren't afraid to die. They're already killing each other every day on the streets by the hundreds. Drive-bys, gang shootings, they're not afraid to die. Death penalty doesn't mean anything unless you use it on people who are afraid to die. Like... the bankers who launder the drug money. The bankers, who launder, the drug money. Forget the dealers, you want to slow down that drug traffic, you got to start executing a few of these bankers. White, middle class Republican bankers.

      • Re: (Score:3, Insightful)

        by Anonymous Coward

        It's amazing that anyone is surprised by this. HSBC is part of the establishment and therefore exempt from the penalties that the little people have to face.

        Imagine this. 0.1% of human beings have managed to strip mine the world's wealth. They understand that the only way to keep the other 99.9% of humans from murdering them and taking all their stuff is to keep them so stressed out that they can't think straight enough to notice.

        When you are worried about terror, paying your mortgage, keeping or getting a

    • by Anonymous Coward on Tuesday May 28, 2013 @07:38PM (#43845635)

      Or the $420 billion laundered by Wachovia [wikipedia.org], for which they paid a $160 million fine.

      This is almost certainly less than the profit they made - international money transfers are not cheap - and nobody was prosecuted.

      It really is one law for the rich...

    • by Anonymous Coward on Tuesday May 28, 2013 @07:43PM (#43845659)

      I'll just leave this right here...

      http://www.guardian.co.uk/business/2013/may/23/hsbc-court-threat-money-laundering-charges

    • by swalve (1980968)
      I think that's more than the Gross National Product of the entire world, since the beginning of time.
      • by NemosomeN (670035)
        Maybe not if you adjust for inflation, but it is certainly more than could have possibly been laundered. Even at a 1% fee for laundering it, which I imagine is on the low end, HSBC would be the largest organization in the world, by far.
    • that HSBC may have laundered..

      Blue collar crime does not pay...

    • by Zemran (3101)

      but they give the US their cut so it is OK. I work in various countries and have had to get used to the simple fact that money laundering just means not giving a cut to the US. I can shift as much money as I like from any country to any country without question as long as I pay 6% but if I take too much of my hard eant money in cash from one country to another I am called a money launderer. All the guff about criminals is just guff. Criminals can use any system, but good people and bad people want to sa

    • by mvdwege (243851)

      That's a really facile and useless quip.

      Just because murders and rapists exist does not make it right to rob you, for example. This 'tu quoque' argument is a fallacy precisely because while it may point out the hypocrisy in one party, it does not address the right or wrong of the action under discussion.

      So, simply on the facts, is money-laundering a crime, and did LibertyReserve engage in it? Tough shit. They brought the prosecution on themselves then.

    • Your comparison to HSBC fails because (1) HSBC was not specifically set up to facilitate money laundering and other criminal activity, and (2) the vast majority of HSBC's business is not in support of criminal activity.

    • by DrXym (126579)
      Slightly off the mark there. HSBC's Mexican affiliate is charged with laundering $7 billion of money and there were a range of lesser but still serious charges from other places in the world. And consequently they were slapped with a $2 billion dollar fine which may even be increased.
  • karma truck (Score:5, Insightful)

    by magarity (164372) on Tuesday May 28, 2013 @07:29PM (#43845563)

    "a rising sense of panic as fortunes have disappeared in an instant"

    So now they know how their victims feel?

    • by iggymanz (596061)

      let's hope the scum weeds out other scum in revenge

    • So now they know how their victims feel?

      Money laundering outfits like this rarely take down just criminals. There are legitimate reasons for currency conversion, etc., that both companies and private individuals engage in. Money laundering works by throwing good money in with bad and obfusciating which is which;

      Undoubtedly some innocents will be harmed by this draconian action. But don't let that scare you off getting righteous about the whole affair. In other news, your bank stole nearly killed the world economy, and cost trillions upon trillion

      • This is only idiots trust their money to a corporation that doesn't follow the laws. It will attract criminals, and eventually they'll end up without their money.

        • This is only idiots trust their money to a corporation that doesn't follow the laws.

          Every company you've purchased something from recently has broken the law. Every. Last. One. And you want to know how I know? Because even our own government can't keep track of the number of laws on the books. Our legal system is hopelessly complex; People break the law just making dinner these days (no really; google for 'short salmon').

          It will attract criminals, and eventually they'll end up without their money.

          Yes, and in the same way, if a couple terrorists hole up in a hospital, we should just blow up the entire hospital, killing everyone inside... because otherwise it will at

          • Such a terrible, terrible argument. There is a difference between what I as an individual should do to maximise my survival, and what a mythical diety in the sky should do to promote "fairness". I as an indivdual should look to minimize risk. Absolutely no one who was using liberty mutal ( edxcept the criminals) was minimizing thier risk. They really do have only themselves to blame for putting themselves in that sitaution. It was very clear for a very long time that liberty reserve was not following the la

      • by Yaur (1069446)
        Liberty Reserves MO was high on fees and low on questions. I suppose there could theoretically be a reason to use them, but the only people I know who carried a balance with them got said balance from HYIPs... so I can't feel too bad for them.
      • (Sobstory warning) Yeah. I bought some bitcoins a couple years ago to use to try to develop a new escrow service for them. I never felt good enough about that project to launch it, though.
        They went up in value to $800, so I listened to Slashdot and sold them when they were worth about 1/10 as much as they would be today. Back then, the only way to get your money out of Bitcoins for a Canadian was from Mt. Gox to Liberty Reserve, then to private traders. I gradually traded $200 of that LR out for cash and w
  • How is this news? (Score:5, Interesting)

    by haruchai (17472) on Tuesday May 28, 2013 @07:30PM (#43845565)

    There's a financial agency that's not a money-laundering operation? We live in interesting times.

  • I find it ironic that the attorney general and law enforcement agents got all worked up about a six billion dollar scheme while the federal reserve corporation pumped out trillions of dollars to mask banker fraud and said bankers have yet to face signficant regulator oversight and proscecution. It is kind of like those small yappy dogs you see in peoples yards chained to a short leash. So excited to serve and protect but restrained by their master.
    • by dkleinsc (563838) on Tuesday May 28, 2013 @08:20PM (#43845877) Homepage

      the federal reserve corporation pumped out trillions of dollars to mask banker fraud

      No they didn't. The Federal Reserve pumped out trillions of dollars because that's what the Federal Reserve is supposed to do in a recession. They pumped out a lot of cash after the S&L collapse in the 1980's too, when the bankers weren't protected and many went to jail.

      And I'm not saying the Fed shouldn't be questioned or examined, but that's not in the category of things they've done that's actually wrong or fraudulent in some way.

      • by anagama (611277)

        Except this time, unlike the S&L crisis, NOBODY is going to jail. Google:

        William K Black (http://en.wikipedia.org/wiki/William_K._Black)

        And just read any random thing he's written or transcript from an interview he's given.

        • That's not a valid use of the word "Except". You're not contradicting anything the GP said. You are superficially adding information, but nothing that wasn't already implied - the GP was very obviously providing a contrast when he gave an example of the Fed injecting money during the S&L scandal.

          The GP is entirely right. Whether you're Keynes or Friedman, in fact whether you're anything other than the nutty Austrian kooks that seem to dominate today's economic agenda despite hundreds of years of evid

  • Chatter on criminal web sites show a rising sense of panic as fortunes have disappeared in an instant.

    Are you sure this wasn't just a MMORPG?

    • by esampson (223745)

      Three thousand hours, three thousand hours clicking on that mouse, collecting weapons and gold. It's almost as if it was a huge waste of time.
      --Sheldon Cooper

  • by honestmonkey (819408) on Tuesday May 28, 2013 @08:33PM (#43845963) Journal
    I like that they laundered "$6 billion dollars". So one guy, Mr. Six Dollars had his billion dollars laundered? Or was it a billion and six dollars? A billion dollars worth of six dollar bills? Or is it that the dollar sign or the word 'dollars' was redundant? Hmmmmm.
  • by 140Mandak262Jamuna (970587) on Tuesday May 28, 2013 @08:46PM (#43846047) Journal
    The mistake they did was, they did not launder enough money. If they have done may be 300 billion or more and insinuated themselves deep into many national economies, then they would have become too big to fail, too big to jail.
  • Why is it that reading ''global criminal conduct' makes me think
    of states, whether or not united, first.

  • by Neo-Rio-101 (700494) on Tuesday May 28, 2013 @10:27PM (#43846663)

    We all know that this is the first salvo being fired at digital currencies.

    The "powers that be" running the world's major banks in concert, can't have any currency run outside of their control and manipulation, because then they would lose their grip on the world's economies (and in turn, their people) to do their bidding.

    If they can't latch control onto Bitcoin or other currencies, they will attempt to stifle it's ascendancy, or drive it far underground.
    Remember that they only manage to control the world because we have to use the major currencies under their control, which gives them their license to print credit at the cost of everyone's freedom who actually has to do the work for it's creation.

    • That's exactly what this is. I don't doubt that Liberty Reserve was used to launder some money, but that isn't what this is really about. Or at least there is a bigger issue than money laundering, which is an attempt to kill digital currencies that governments can not control. With its central authority Liberty Reserve was a much easier target than say, Bitcoin. Make no mistake about it, lots of governments would just love to squash Bitcoin because they fear losing control over money, but they'll have to se
      • They can literally manipulate, and force people to flee away from bitcoin if they can manage to take control above 51% of the network computing power. The government have the money to build such computing infrastructure.

        • I would forget about governments attempting that.... but banks? Almost certainly.

          Actually trading bitcoin on a spot market would be completely unworkable however, because without any mechanism for guided market maker manipulation, price fluctuations would happen at complete random (which has been the case with bitcoin historically).
          Professional currency traders specifically look for price manipulation opportunities to make consistently profitable trading decisions. Without the manipulation, you may as well

          • They aren't doing it. There have been studies, basically they found that the all-star traders in most investment banks were little better than coin flips when averaged over long periods, it's just that when they guessed right, things went well, and for everyone doing badly, there was someone hitting the right buttons. That and Libor and inter bank exchange rates.

    • by rmstar (114746) on Wednesday May 29, 2013 @05:35AM (#43848403)

      The "powers that be" running the world's major banks in concert, can't have any currency run outside of their control and manipulation, because then they would lose their grip on the world's economies (and in turn, their people) to do their bidding.

      I'm here to say that I am fine with this.

      Governments are needed to bring order and stability, and they do that by enforcing the rule of law, including the legality of business. Money laundring undermines this, so it must be prosecuted. Actually, I am quite happy that they are finally doing somthing about money laundring.

      That goverments don't get all what they do 100% right is normal for any human endeavour, and a reason to engage into politics, not to pretend we will be better off without governments.

      Anyway, bitcoins & co need to be regulated to avoid it becomming a vehicle for illegal business.

      • by moeinvt (851793)

        A government that does not enforce the rule of law UNIFORMLY throughout the nation has given up its just power to govern.

        Wall St. banks engage in thousands of acts of fraud, forgery and perjury yet continue to operate with none of their employees investigated and prosecuted? Government employees smuggle guns to the Mexican drug cartels and those guns are used to commit murder yet nobody is prosecuted. Where's this "rule of law" you mention?

        Like the OP said, the money monopoly is the cornerstone of the ban

  • Isn't that, by definition, what they are supposed to do?

    They take in one type of currency and give you back a different set of currency.

  • I'd ask what HSBC might have agreed to other than fines - such as giving information on their (offshore) customers to US investigators.

You can do this in a number of ways. IBM chose to do all of them. Why do you find that funny? -- D. Taylor, Computer Science 350

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