Hackers switch to new digital currency after Liberty Reserve

Fri Aug 9, 2013 8:53am EDT
 
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By Emily Flitter

NEW YORK (Reuters) - Three months after a team of international law enforcement officials raided the digital currency firm Liberty Reserve, cyber experts say criminals are increasingly turning to another online currency called Perfect Money.

Idan Aharoni, the head of cyber intelligence at EMC Corp's RSA security division, said that some online scam artists and thieves are using Perfect Money's digital currency to launder money and conceal profits in much the same way they allegedly did with Liberty Reserve's currency.

On behalf of their clients, which include major financial institutions, Aharoni and his team monitor Internet forums that hackers use to sell stolen credit card information. After Liberty Reserve was taken down in May, activity on these forums initially slowed and then picked up again, with some hackers saying they would accept Perfect Money for payments, he said.

"We expected a large migration to another e-currency, and that has happened," said Aharoni, whose RSA unit sells security services to 30,000 corporations and government agencies, including the popular Secure ID tokens that protect access to computer systems.

Perfect Money, which has been in operation since at least 2007, could not be reached for comment. A request submitted through its website failed to elicit a response, and the company does not list a phone number for its offices or identify any management or employees.

Reuters could not determine who owns Perfect Money. Its website says it is based in Panama, but the Panamanian government said in a statement in January that Perfect Money does not have offices in the country and has not been issued any licenses by securities regulators to operate there.

Law enforcement agencies in the United States and around the world have expressed concerns that digital currencies, which are not tied to any particular government, are emerging as vehicles for hackers, cyber criminals and drug dealers to launder money.

Currencies like Perfect Money are governed by a single company or entity that administers the transfer of units between customers. Once a user obtains an account, he or she can transfer Perfect Money units to other users inside the system. These units can be redeemed for cash or bank credit by third-party exchange services, which are separate businesses not under control of the currency's operator.   Continued...

 
Preet Bharara, United States Attorney for the Southern District of New York, describes charges against Costa Rica-based Liberty Reserve, one of the worlds largest digital currency companies and seven of it's principals and employees for allegedly running a $6 billion money laundering scheme at a news conference in New York, May 28, 2013. REUTERS/Mike Segar