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Cybercriminals are turning to a new digital currency, Perfect Money, in the wake of the closure of Liberty Reserve, according to security experts. Liberty Reserve was described by U.S. prosecutors as “the bank of choice” for cybercrime.
American authorities allege that Liberty Reserve had processed $6 billion of illegal payments. Five of its senior employees were arrested in May this year. The authorities allege that Liberty Reserve was “a financial hub of the cybercrime world, facilitating a broad range of online criminal activity, including credit card fraud, identity theft, investment fraud, computer hacking, child pornography, and narcotics trafficking.”
Perfect Money – which describes itself as “the new generation of internet payment system” – is being used on forums to pay for stolen credit card information, according to Idan Aharoni, head of cyber intelligence at RSA. Aharoni says that after Liberty Reserve was taken down in May, activity on such forums slowed, but it has since resumed, with Perfect Money being accepted as payment for card details.
“We expected a large migration to another e-currency, and that has happened,” said Aharoni, in a report on NBC News. “If it was expected at first that the Liberty Reserve takedown would have a long-lasting, substantial effect on the level of fraud, that’s not true.”
An earlier report by TechWeekEurope quoted an unnamed source familiar with cybercrime forums, who said that Perfect Money had become the currency of choice for vendors selling stolen credit card details.
“I’ve seen a multitude of payment options now becoming acceptable by specific vendors, but the majority seem to go with Perfect Money,” added the source.
Currencies such as Perfect Money allow customers to transfer Perfect Money (a currency unit which has an exchange rate against dollars and Euros) to one another. The currency units can be sent to other people via email, or redeemed at exchange services.
Such systems appeal to cybercriminals due to the fact that it is easy to remain anonymous within the system (ie to buyers), and even, to an extent, from the company that administers the system, according to a report by Reuters.
Perfect Money charge 0.5% for transfers to other Perfect Money accounts, and higher fees for transfers to other banks. “At this moment this commission is set at USD/EUR 100 +3% of the amount withdrawn. The commission is debited from the sender’s remaining account balance.”
The case against Liberty Reserve was described by U.S. Attorney Preet Bharara case as “the largest international money laundering case ever brought by the United States”.
U.S. Attorney Preet Bharara said that an undercover agent had been able to set up an account with Liberty Reserve in the name, “Joe Bogus,” with an address of “123 Fake Main Street” in “Completely Made Up City, New York,” according to Bloomberg. Court papers state that an international gang of cyber thieves who stole $45 million using bank ATMs in a heist spread across 27 countries used Liberty Reserve to distribute the profits.
Liberty Reserve charged 1% for each transfer, plus a 75c “privacy fee” to make transactions untraceable, according to the Financial Times.
Author Rob Waugh, We Live Security