Here’s a fascinating story about a bank for criminals. You’re probably familiar with companies like bit.com—a totally legitimate company—and how it’s changed banking, cash and credit transactions.
There was a similar company called Liberty Reserve that was shut down by federal authorities in New York. The owners and chief officers have been charged with crimes. Here’s the story in the Atlantic Magazine: http://www.theatlantic.com/magazine/archive/2015/05/bank-of-the-underworld/389555/
This virtual bank for criminals worked like PayPal except for three major differences:
1. Liberty Reserve created digital currency that could be saved or traded
2. Liberty Reserve didn’t require any credit info or even proof of identity. All they asked for was an e-mail address
3. Every account holder was totally anonymous!
What a great idea for a bank for criminals! With only an e-mail address, any drug lord cold buy “LRs” (the virtual currency) for $1.00 a piece and leave them in Liberty Reserve like a bank. Other criminals who wanted to be paid, set up their own accounts, transferred the LRs to the new account, and cashed them out—Liberty Reserve paying a dollar for each LR claimed.
The US Treasury Department shut down the company in 2013. But it’s so simple to run, don’t you think there are many more banks still out there who work as banks for criminals?
