Founder of Digital Currency Service Liberty Reserve Gets 20 Years in Jail

Ever wondered why the creator of Bitcoin Satoshi Nakamoto kept his identity hidden for all these years? He probably suspects this will be his fate as well.

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Arthur Budovsky, the founder and operator of Liberty Reserve, has been sentenced to twenty years in prison on Friday by a U.S. District Court in Manhattan. The service offered digital currencies pegged to the USD, EUR or gold that many online firms used as an alternative funding method across international borders. As the service offered anonymity for money traders the American court ruled that it was used to commit money laundering.

According to the accusations, Liberty Reserve was processing more than $8 billion in financial transactions, making Budovsky over $25 million in earnings.These funds allegedly originated from crimes including identity theft, credit card fraud, computer hacking, child pornography and narcotics trafficking.

Unlike Bitcoin and other Cryptocurrencies Cryptocurrencies By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw By using cryptography, virtual currencies, known as cryptocurrencies, are nearly counterfeit-proof digital currencies that are built on blockchain technology. Comprised of decentralized networks, blockchain technology is not overseen by a central authority.Therefore, cryptocurrencies function in a decentralized nature which theoretically makes them immune to government interference. The term, cryptocurrency derives from the origin of the encryption techniques that are employed to secure the netw Read this Term, Liberty Reserve was a centralized service and not a decentralized network - which allowed the authorities to bring down the service. This case demonstrates the brilliance of Blockchain Blockchain Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned.) In this sense, blockchain is immune to the manipulation of data making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tampe Blockchain comprises a digital network of blocks with a comprehensive ledger of transactions made in a cryptocurrency such as Bitcoin or other altcoins.One of the signature features of blockchain is that it is maintained across more than one computer. The ledger can be public or private (permissioned.) In this sense, blockchain is immune to the manipulation of data making it not only open but verifiable. Because a blockchain is stored across a network of computers, it is very difficult to tampe Read this Term for enabling a non-fiat currency resilient to such an external takedown on the one side but also the harsh response of legal bodies against unorthodox financial innovators.

In early 2015 the IT manager of Liberty Reserve Maxim Chukharev was sentenced to three years in prison on charges of conspiracy to operate an unlicensed money transmitting business. The US Justice Department said that he worked with the company’s former chief technology officer, Mark Marmilev, at Liberty Reserve in Costa Rica to maintain the computer infrastructure. Marmilev was handed a five-year sentence in December 2014 plus three years’ supervised release.