Last month, an undercover federal agent set up an account with Liberty Reserve, a virtual currency exchange based in Costa Rica. Registering online, the agent entered the name “Joe Bogus”, typed the account name as “tostealeverything,” and chose the address “123 Fake Main Street”.
With a few keystrokes, the US secret service agent had entered the world of the cyber exchange and unlocked a way of converting dollars into LR, the virtual currency of Liberty Reserve.
He transmitted hundreds of LR dollars between the Joe Bogus account and another undercover account, identifying one transaction as “your share of the cashout” and another “for the cocaine”.