Liberty Reserve seizure creates problems for online businesses
The troubles for Liberty Reserve have only just begun. The Justice Department has accused the online currency exchange of laundering $6 billion and has already frozen assets and seized their website.
But let’s say your company was using Liberty Reserve for non-money laundering purposes. The last few days have resulted in little clarity about what the future holds.
“Friday was the first time that we noticed that something was amiss,“ says Mitchell Rossetti. He’s the co-founder of ePay-Cards and sells prepaid virtual debit cards using the online currency Liberty Reserve was trading in.
Rossetti got confirmation Tuesday that the site had been shut down. Since then, he’s heard nothing from the Justice Department about the $28,000 seized from his account.
“We are a legitimate business that has been hurt by this action,” he says.
Ironically, he chose Liberty Reserve because of its security after some bad experiences with PayPal.
They made the switch to Liberty Reserve so that “if any issue would come up, we would be able to discuss that directly with the customer, what happened, and look at their accounts and make a decision. But we weren’t exposed to any fraud.”
The business relies on trading online currency to operate and he’s not sure what it will mean for the future of ePay-Cards.
Rossetti talked to his staff earlier in the day. “Their question to me was, 'what do we do, do we have a future?'" he says. "And I advised everyone to have their resumes ready, but don’t send them out yet. We will look for a way to come back from this, but it is going to be difficult.”