The indicted founder of digital currency Liberty Reserve says the U.S. government began targeting him only after he refused to turn over the source code for his proprietary system to the FBI.

Arthur Budovsky, who is fighting extradition to the U.S. from Spain, told a Madrid court that the FBI approached him in 2011 to obtain the source code for what he says was the purpose of undermining the service.

"I refused. It's like asking Coca-Cola for their secret formula," he told the court, according to the Associated Press. "The truth is that the U.S. wants to protect its monopoly on financial transfer platforms."

His denial launched a witch hunt, he says, that resulted in his indictment last year along with six others in a $6 billion money-laundering scheme, in what authorities are calling the largest international money laundering case ever prosecuted.

It also resulted in U.S. authorities seizing Liberty Reserve's servers in Holland, giving them access to financial information on some 800,000 users and 44 million transactions and the ability to trawl through the data for evidence of illegal activity conducted by Liberty Reserve users. The case was handled by the U.S. Secret Service and DHS's Homeland Security Investigations.

The seizure was reminiscent of legal actions the government took against e-Gold in 2005, the premier digital currency of its time, when authorities raided the company's Florida offices and seized digital transactions to uncover money laundering and other illegal activity by carders.

The founder of e-Gold, Douglas Jackson, was indicted on charges of operating an unlicensed money transmitting service, effectively ending e-Gold's operations, to which he pleaded guilty. But the biggest boon to the feds came from e-Gold's transaction data seized in the raid, which helped them arrest and convict some of the underground's top carders and hackers.

Following the raid on e-Gold, Budovsky, 40, set out to fill the void and become the predominant digital money laundering service in the world. But he vowed to succeed where e-Gold failed by building his digital currency empire outside the U.S. to elude law enforcement, according to authorities. He even renounced his U.S. citizenship to become a Costa Rican national, allegedly telling immigration authorities that he feared his software company would open him up to liability in the U.S.

Budovsky, a Costa Rican citizen of Ukrainian origin, acknowledged in court that he created the secure platform for the service in 2006, the same year it was incorporated as a business in Costa Rica, but sold his share of the business the next year, only remaining on as a consultant. Authorities say Budovsky continued to operate the service with Vladimir Kats until the two had a falling out in 2009.

Liberty Reserve required only a valid email address to open an account and initiate transactions. It charged a 1 percent fee for each transaction, and, for an additional 75 cents, offered to hide a user’s account number in transactions. The service had at least 200,000 customers in the U.S., but failed to register in the U.S. as a money-transmitting service. Although the service had legitimate customers, the anonymity it provided attracted a large clientele from the criminal underground who relied on offshore Liberty Reserve currency exchangers to move their ill-gotten cash in and out of the financial system.

Budovsky was arrested in Spain last year, while others were arrested in Costa Rica and New York. Police in Costa Rica also raided three homes and five businesses linked to Liberty Reserve.

This is the second time Budovsky has been charged with operating an illegal money operation. In 2006 he and Katz were indicted for operating another illegal financial services business called Gold Age that was similar to Liberty Reserve. Budovsky was sentenced in 2007 to five years of probation after pleading guilty in New York to those charges.

The same year he was indicted in the U.S., he established Liberty Reserve in Costa Rica. Authorities say that after Budovsky learned in 2011 that Liberty Reserve was being investigated – presumably around the same time that he says the FBI sought his source code – he pretended to shut down the service in that country, but instead allegedly began operating it through shell companies.

Authorities say he also began emptying million of dollars from Liberty Reserve’s bank accounts in Costa Rica and laundered it through shell companies in Cyprus, Russia, Hong Kong and other countries. He also allegedly set up a portal that appeared to give Costa Rican regulators a view of transactions to monitor them for money laundering, but fed fake transactions to the portal to throw authorities off, according to the indictment.

Budovsky's attorney in Spain could not be reached for comment.