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LibertyReserve – Fallout, Further Developments, and Daily News from the Industry

3

Hello everyone! By now I’m pretty sure you’re all going to be more than familiar with the ongoing story with LibertyReserve, possibly the biggest news event to occur in the online HYIP industry ever, and possibly the most damaging. You can recap on the events surrounding the arrest of the LibertyReserve owner Arthur Budovsky in my blog post covering the story plus some of my own initial thoughts on the subject first published here.

I never imagined LibertyReserve was quite as big as it was, I mean I guessed a lot of money was being channeled through them, the latest figures suggesting six billion dollars is just absolutely staggering. And as more and more details start to emerge in the mainstream media – I’ve already been watching it covered in detail on BBC World as well as the English language channel from the German station Deutsche Welle – it’s becoming increasingly obvious that we are a very very long way from hearing the end of this. Indeed there have now been further developments in the case that in my opinion could turn out to be even more worrying than the closure of LibertyReserve itself.

You see, whereas e-currency providers have closed in the past, either through mismanagement and fraud as was the case with StrictPay, or through the actions of the US government as was the case with e-Gold, the HYIP industry itself was never under any kind of attack and always carried on. In the latest news to emerge from the US Department of Justice however it now seems that they have a new target in their sights – online exchange providers. In much the same way as LibertyReserve had their domain name seized, prosecuting attorneys in the US have now made an application to the courts to do the same to a lengthy list of e-currency exchangers that handled LibertyReserve.

As you know, LibertyReserve by itself is all but useless. You can’t put money directly into your own account by yourself, nor can you take it back out again. You have to get a third party exchanger to do it for you in exchange for a fee. These played an essential part in the mechanics of the HYIP industry, and also it would seem in the opinion of the officials in the Department of Justice an essential part in the facilitating of money laundering. It doesn’t seem to matter anymore what you the individual customer of these exchangers wanted to use their services for, 99% of which are totally legitimate I’m sure, it seems that they need only handle tainted money to become culpable in the crime. It would also seem that the exchangers themselves would have no way of knowing the true origins of the money they were handling (that having been the way LibertyReserve had organized things) isn’t going to stop the authorities from closing some perfectly respectable e-commerce based businesses around the world, none of whom are being directly implicated in any wrong doing themselves.

OK, not to sound like an apologist for them or anything, I’m sure that most of them must have had a reasonable guess that 100% of the money passing through their websites was unlikely to be the proceeds of an honest day’s work, but I just don’t see what they could have done about it. I’m well aware of the old adage “ignorance of the law is no defense” and the exchangers can hardly complain if there is some action taken against them, but seizing their domains? That sounds a bit harsh to say the least. By all means get them to explain their actions and make them more accountable in future, but closing them seems excessive. And in my mind sets the industry back a bit further than the simple act of just closing LibertyReserve itself as it hits other less tarnished processors who could potentially have taken up a lot of the business left behind by the closure. The full document calling for the seizure of the exchangers domains can be read in .PDF format here and includes some very well known and trusted exchange providers that I would have described as dependable and reliable companies that I have used countless times over the years myself such as e-CardOne and WM-Center.

That then takes me on to the subject of PerfectMoney, who as you know offer an almost identical service to LibertyReserve and using most of the same exchangers and tipped by many as the natural successor to LR. In fact I was always surprised at how PM weren’t a lot bigger than they were, given that in my opinion have a far superior website in terms of protection from hackers, and how shockingly inept and poor LR’s customer support was. I had been thinking this would ultimately (and somewhat ironically) be beneficial to PerfectMoney. The fact that PM are only a fraction of the size of LR, and to the best of my knowledge not being run by an already convicted felon, then it might just have kept them off the radar of the same prosecutors who went after Arthur Budovsky and his cronies at LibertyReserve. But this latest move against the exchangers puts the breaks on this. PerfectMoney’s recent announcement (made before the handcuffs had fully snapped shut on Budovsky’s wrists by the way, lol!) that they will no longer be offering their services to US citizens or residents was clearly an attempt to avoid the same fate. Whether it works or not may well prove to be a purely academic point at this stage if the Department of Justice’s plans for the exchangers is implemented, as it basically cuts off the arms and legs of PerfectMoney.

So in an unrelated incident, though one I’m sure inspired by the recent raids on LibertyReserve, regulatory bodies in Panama where PerfectMoney are registered issued a statement about the company and the legality of their activities. It may be of interest to you if you were speculating on the possible future of PM, wondering if the same fate awaits them as their rivals. Well, you can read the full article here,
but to give you just a brief oversight, what’s basically happening here is that the Panamanian government has given a list of activities which require a license, and saying that PerfectMoney has no such license for any of them. These are listed as, and I quote, “intermediation, administration, or advisory in securities, financial instruments or forex, in or from the Republic of Panama, within the scope of the Securities Law.”

Now, I don’t really know what to make of this, because to the best of my knowledge PerfectMoney never had any involvement in any of those things. The statement goes on to question the validity of the postal address claimed by PerfectMoney, though I never really thought that was genuine anyway. It just seems a bit, well, weird that the Panamanian authorities would issue a statement saying that PerfectMoney doesn’t have a license to do something they’re not. I mean they may as well be telling I don’t have a license either for all the good it does, so really it just smacks of the financial regulators there trying to distance themselves from PM in advance of any expected showdown with US prosecutors. You may remember that the US did in fact invade Panama in recent history to arrest their President. Not that he was a particularly nice guy or anything, I just mention it to emphasize that the current regime will still have some very fresh memories of who’s really in charge of the region and who gets what they want when they want it – Uncle Sam. But whether or not this means you seriously need to be worried about the future of PerfectMoney and whether or not they will become target number two is still unclear. The fact that they were left off the list of websites under investigation is I suppose encouraging by itself, but it really boils down to one essential point – do they comply with US legislation or not? If yes, then carry on. If no, then watch out!

Perhaps the most interesting piece of coverage however, getting back to LibertyReserve once again, was a news conference with U.S. Attorney Preet Bharara, the US attorney leading the case. Also speaking are a number of other state officials involved with the investigation, though it’s Bharara who does most of the talking. I found it on the Bloomberg TV station which some of you might know tends mostly to focus on business and financial news, and you can find it on their website here.
Mostly this just recaps on the facts of the case that have been slowly been seeping out over the last week, though summed up succinctly and eloquently in one place the leading prosecutor. The entire video is just short of 38 minutes long, and is well worth watching until the end. It should certainly open the eyes of any admins out there who think nobody is looking over your shoulder. The men and women participating in this news conference seem to be utterly focused, committed, and driven. I can only imagine the motivation of the veritable army of investigators working under them.

Assuming the allegations of child pornography are true then I have no sympathy whatsoever for anyone who deliberately closed an eye while enabling its actual purveyors and have no objection to them spending the rest of their days in a jail cell. But when it comes to the HYIP industry, like I said in an earlier post there is no way this means the end of it. Far from it in fact. For all the discussions you will hear in the news conference you see, one point that everyone fails to pick up on is this – demand. HYIPs are in my opinion a form of gambling, the vast majority of MNO readers are well aware of this, and freely accept the risk. If people want to gamble then they will, and nothing the entire weight of the US government can do is ever going to stop that. I find it interesting though that the point is raised more than once towards the end of the conference that there is no real crusade as such against the concept of e-currencies or virtual payment processors as such. If any other provider, in terms of what we are interested in that’s going to be PerfectMoney, EgoPay, and SolidTrustPay wish to provide such services then there are regulations and laws in place to protect your customers. Comply with those laws and regulations and we’ll all get along fine for many years to come. Break them and expect a 4.00a.m knock on your door!

Just one other quick point I would mention though, and this is mostly for amusement, is the suggestion that users might avail of a refund. It was suggested that this would be a rather simple matter of contacting the prosecutor’s office and explaining the situation. I’ve also seen this bounced around on a couple of the forums as well, and would have to agree with the position that this is something you need to be extremely careful with. In no uncertain terms these people have made it clear that they are of the opinion that 99% of all transactions were illegal. If the numbers quoted are to be believed it could take them literally decades to trace every single transaction, and so if you freely present themselves to them, trust me, they’re gonna have some questions for you that you don’t want to hear. Not only will you have to identify yourself to them, you will also have to explain what you were doing with LR in the first place, where you got the money from, how you paid tax on it, whether the activity was legal in the first place such as a HYIP for example (saying “I thought so” won’t be good enough!), and so on. Unless you can account for every last cent in a totally transparent, legal, tax compliant way, then don’t bother. And don’t even think of telling lies to these people!

So all in all we are in for some interesting times ahead for the HYIP industry, certainly a slow couple of months I guess, but “nature hates a void” as the saying goes, so things will continue though only in a very different, perhaps improved, format.

DAILY NEWS FROM THE INDUSTRY


REWARDSWEEKLY – LR EXCHANGE AVAILABLE WITH 0% FEE

It is great to see that the current #2 ranked program on MNO’s Premium List, RewardsWeekly, cared enough about the members for the admin to allow internal exchange for LibertyReserve. Yes, you heard right – if you had an active deposit in RewardsWeekly to its only plan of 10% for 40 weeks with principal return on expiry via LibertyReserve you can convert your profits into PerfectMoney, SolidTrustPay, or EgoPay. I believe this step shows not only that the program is in the perfect financial state but that the admin thinks that his program can survive LibertyReserve and without penalizing investors for the loss of funds there. Of course it’s very possible that RewardsWeekly didn’t have a whole lot held in LibertyReserve in the first place, and possible they maintained only a minimum balance for maintaining instant payouts. I can confirm that I successfully converted my own LR balance into PM as per the admin’s instructions given in the latest newsletter published below, and was paid instantly as usual. So I can’t find the words to praise the admin of RewardsWeekly enough for his efforts and keeping the faith. The program has been paying for four months now, and the first members are already in good profits already. Hopefully RewardsWeekly (reviewed here) will be running for a long time to come:

Currency Exchange is available now.
Dear investors and website visitors,
As you know, LR site is closed now. In recent days, our LR payments can’t be processed, they have been moved to pending status. From now on, we have added Currency Exchange function. You can exchange your LR account balance to PM, STP or EgoPay with 0% fee. At the same time, you can aslo exchange PM, STP and EgoPay with some fee. We have moved all LR pending withdrawals to your account balance. You can exchange it to other e-currency first, then withdraw it.
How to exchange your e-currency?
Please login in your account, and click “Currency Exchange”, then exchange your LR account balance to other e-currency.
How to add your other e-currency account?
Please login in your account, and click “Edit Account”, please add your other e-currency account here.
Although LR site is gone, but our site will be still working well, you can’t lost any money here, please believe in us.
Sincerely, RewardsWeekly Support Department
”.


SILVEROZ – LR PROFITS CONVERTION TO PERFECTMONEY ALLOWED WITH FEE

The admin of SilverOz was not so generous, but still allowed LR investors to convert funds from LibertyReserve to PerfectMoney for a 75% fee. If you consider this too high, just remember that if you kept money in LibertyReserve at the time of its closure you would have lost everything, like millions of clients around the world. To use the current exchange rate you have to be logged in to your SilverOz account and then change Exchange tab to fulfil it instantly. After that you can withdraw to your PerfectMoney account and get paid instantly as all the payments from SilverOz (including those processed to SolidTrustPay and EgoPay now) are. Be aware though, the exchange fee will be raised to 90% in 24 hours, while in a week the entire mechanism will most likely be eliminated and a new e-currency introduced. I’ll let you know any updates as soon as I get them, but I just remind you that the program pays instantly on the 2% for 150 days with the original principal return on expiry and you can read the full review of SilverOz here:

Dear friends
As the site Liberty Reserve officially stopped its existence we obliged to delete this payment system from our list of supported EPS. For those who deposited in Liberty Reserve there is the possibility to convert the existent profit with the 75% fee until the 1st of June 2013 and with the 90% fee after that until the 7th of June.
Soon there will be added another payment systems on our site for your convenience.
Best regards, SilverOz team
”.


SECUREEARN – DECISION ON LIBERTYRESERVE PENDING AND STICKY LISTING ON MNO

It looks like the admin of SecureEarn wasn’t all that stressed by the LibertyReserve collapse and even tried to approach it with a philosophical point of view, quoting Bruce Lee in one of his curious updates posted which will make you at least ponder a bit on the whole story and its huge affect on the HYIP industry. See below:

Bruce Lee – Be water.
Hello dear members,
due to recent Liberty Reserve shut down the e-commerce industry is at lowest point that it has been in last few years. Instead of worrying about industries future without such major electronic currency as LibertyReserve was, SecureEarn LTD. took step back and looked at this situation from philosophical stand point. We have to be like water, adjust to current situation and new opportunities will take place in next few months.
In this case I would to quote Bruce Lee – “Be like water making its way through cracks. Do not be assertive, but adjust to the object, and you shall find a way around or through it. If nothing within you stays rigid, outward things will disclose themselves. Empty your mind, be formless. Shapeless, like water. If you put water into a cup, it becomes the cup. You put water into a bottle and it becomes the bottle. You put it in a teapot, it becomes the teapot. Now, water can flow or it can crash. Be water, my friend.”
Video version:http://www.youtube.com/watch?v=LTnSEFsInp0
Best Regards, SecureEarn LTD. Team.

I guess that philosophy forced SecureEarn‘s admin to take the plunge and do exactly the opposite of what was expected during a crisis in the industry – he purchased Sticky listing on MNO for a month and became the only program on such a list which certainly shows his unorthodox way of thinking and possibly a hint of his program’s future success. Of course, it’s very unfortunate that the decision for those who invested in SecureEarn via LibertyReserve is still pending, as the admin hasn’t decided what to do with that, at least, the payments to SolidTrustPay, EgoPay, and PerfectMoney, but he promised to find a solution for such members in the near future, and hopefully, he will live up to his promise. For now I would like to remind you that SecureEarn is 10 days old now and paying on the 2.1%-2.7% for 70 business days with principal back on expiry. For the more detailed information on the program please refer to my review of SecureEarn published here. Below is the admin’s thoughts on the future of LR deposits in his program:

LibertyReserve no longer available as payment option.
Hello dear members,
as we all have noticed Liberty Reserve was seized by US government last week and is no longer operating as virtual currency, due to this sad news Secure Earn LTD. is no longer accepting Liberty Reserve as one of the payment options. Members who made deposit via LR will be contacted with exchange options in near future. Please make all future payments with reliable virtual currencies, such as PerfectMoney, EgoPay and SolidTrustPay.
Best Regards, SecureEarn LTD. team.


BRISCOFUND – MOVED TO WAITING STATUS DUE TO WITHDRAWAL LIMITS

I had to move BriscoFund to Waiting status on MNO tonight as I consider their latest withdrawal policies to be questionable at best. Once an investor tries to make a withdrawal request today he gets a message preventing him to submit a withdrawal and saying: “You can withdraw 4 per week only.” The admin told me that she was in hospital and she couldn’t process payments fast enough to satisfy the members’ expectations, but then again why this message showed me and others while I never exceeded this 4 times per week withdrawal limit. There was an explanation given in the latest newsletter for members of BriscoFund today, however it didn’t address the issue of why anyone requesting less than four withdrawals this week were not allowed to withdraw funds. Combined with the admin refusing to extend a banner spot on top of MNO blog for the first time for many weeks, I don’t this looks good for the program’s future. For me it’s more than an excuse to skip the payments for the time being without any justification of these actions. So I would hold off from future deposits in BriscoFund and moved the program to On Hold status until the admin resumes payouts to members. Hopefully it will happen soon, but in any case will keep you all updated on MNO.

The second question raised in the email was the LibertyReserve issue, and unlike some other programs BriscoFund will not be either issuing any refunds to LR investors, nor transferring deposits from LR to other payment processors. Given the poor situation situation with withdrawal requests investors of BriscoFun are facing, it would be stupid to expect anything but that. But withdrawals must be processed on time, and this excuse is unacceptable when we are facing a continued LR debacle. Here’s the latest news from BriscoFund received an hour ago:

Answers
I really do appologize guys that i haven’t been online and work 100% as before but as many of you knows already, i’m still in the hospital after got a very nasty flu virus that is not reponsive to medication. Because of the fact that i can’t work for too long (only half an hour per day i’m allowed) i’m doing the best i can to catch up with all pendings but many of you are withdrawing multiple times a day and that’s not helping me. This is the reason for the new rule implemented today of allowing only 4th withdrawals per week. It’s only a temporary rule until i can catch up with all pendings and/or get back to normal (going home). I really hope you can understand me. Payouts haven’t stopped, are just delayed but i’m doing my best to be back to normal soon. We don’t have an amount limit for withdrawals (no minim and no maxim) just limited the number of withdrawals per week. It’s only logical that if they won’t be so many per day anymore i’ll be able to catch up with all pendings faster. Once this will happen i will remove the new rule (limit) and get back to normal.
Now, regarding the LR issue: everybody lost with LR because only few could have predicted this is going to happen. We lost too but we will survive thanks to the other payment options we have on our site. We can’t exchange or pay you as long as all LR deposits are gone. This is a business decission and i can’t do anything about it even if i’d want to help you and i understand you. You must think that if you wouldn’t have invested with us, you’d have lost your funds anyway only for having them in LR. What happened with LR is not our fault and we can’t be found responsible for this. I know you all would have wanted much better news but i’m just trying to be transparent here and tell you the truth.
What i can tell you is that i will continue to do everything in my power to be back to normal soon (equal if i’ll go home or not) and i will always try to be here for any of you the best i can.
Amanda. BriscoFund.


ADROCAPITAL, JLBCO, AFTER100DAYS – MOVED TO SCAM! DO NOT INVEST!

Please note that both the sites of AdroCapital and JLBCO became inaccessible within days of the news of the LibertyReserve closure being confirmed by the US authorities. I don’t think it a coincidence, as both admins probably lost a lot of money in their LR accounts and couldn’t continue. As for After100Days, the program is paying selectively now, as it was apparently also badly affected by the LR collapse. So please be very careful about After100Days and do not invest there. Apparently after more than seven weeks online the program has run its course and the LR issue was the last nail in the coffin.


GET PAID REPORT FOR 30/05/2013

Here is the list of the programs from my monitor that paid me for the last 48 hours:
From MNO Sticky list: SecureEarn.
From MNO Premium list: NEOMutual, RewardsWeekly, MalaysianINC, EuroStar, RonWards, RFIGroup, SecureAssets, EmpireFinanceGroup, RouletteGURU, EarningAlliance, SilverOz, WeltexTrust, BlackGold.
From MNO Standard list:  PureIncome.
From MNO Basic list: InvestmentCapitalMainaLimited, FiamaCorp, ProfitWealthClub, TheInvestmentBank, TradeAsiaPro, ForexShare, RebateDailyProfits, GoldAssetsFinance, FutureInvests (the first payment received).

That’s all the news for tonight, guys. I hope you enjoyed my article on LR as well, and see you on MNO blog tomorrow when I have an interview with the admin of RonWards. Bye for now and see you all then!

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