How Are You Feeling About The Bitcoin Stash In Your Instawallet Today?

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Not to cast unwarranted aspersions, but one of bitcoin's "competitors" has been put out of business.

Federal prosecutors have filed criminal charges against seven men who allegedly set up an Internet-based currency and used it to launder $6 billion in criminal proceeds, a sign of growing concern among law enforcement about digital cash….

Tuesday's case doesn't involve bitcoin but a Costa Rica-based entity called Liberty Reserve. Prosecutors in Manhattan said the men allegedly set up Liberty Reserve for the sole purpose of establishing an illegal digital currency that could be used to launder money.

For about seven years, Liberty Reserve was a "bank of choice for the criminal underworld," according to the indictment, which said the operation allegedly laundered the money through 55 million transactions before it was shut down earlier this month….

The indictment against Liberty Reserve sends a warning sign to the fast-growing world of virtual currencies. While law-enforcement officials cautioned the indictment against Liberty Reserve shouldn't be viewed as a broad assault against all virtual currencies, they acknowledged it reinforces the need for government entities to closely monitor other operations to ensure they comply with U.S. rules.

U.S. Alleges $6 Billion Money-Laundering Operation [WSJ]

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