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As authorities move on Bitcoin, crooks move on to other digital currencies

August 13, 2013

Who could've seen this coming? In May, authorities charged the principals of Cost Rica-based digital currency exchange Liberty Reserve with laundering $6 billion through Bitcoin; now criminals are abandoning that digital currency for another.

A Reuters report said that scam artists and thieves are now turning to another online currency, Perfect Money, to hide and launder their profits.

Idan Aharoni, the head of cyber intelligence at EMC Corp's RSA security division, told Reuters that the shutdown of Liberty Reserve initially dampened activity on other alternate currency sites.

But eventually, and as expected, activity picked up on another digital exchange. "We expected a large migration to another e-currency, and that has happened," said Aharoni.

Perfect Money says that it operates out of Panama, but that country says it has no such company that has been issued any operating licenses by securities regulators. The identity of Perfect Money's owner(s) is also a mystery.

Other exchanges are used as well, the Reuters report said, but according to a study conducted at Southern Methodist University, Perfect Money is the one that comes up most often. The study found that of 1,000 websites linked to Perfect Money, 70 percent were Ponzi schemes.

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