On Tuesday, federal prosecutors unsealed the indictment of seven men alleged to be involved with Liberty Reserve, one of the world’s most notorious digital currencies. (Liberty Reserve was the preferred payment choice of a booter site used to attack Ars in March of 2013.)

Federal authorities seized LibertyReserve.com and four other related domain names, effectively shutting down the site. The site’s founder, Arthur Budovsky Belanchuk (who apparently renounced his US citizenship in 2011 to become a Costa Rican citizen), was arrested last Friday.

In a 27-page indictment (PDF), the defendants are charged with money laundering and conspiracy to operate unlicensed money transmitting business. They are ordered to surrender "all property, real and personal” including: “at least $6 billion” and tens of millions of dollars more allegedly contained within bank accounts across Costa Rica, Cyprus, Russia, Hong Kong, Morocco, China, Spain, Latvia, and Australia.

Attempts to reach Liberty Reserve via phone and e-mail were not immediately successful.

Prosecutors labeled Liberty Reserve as a “criminal business venture, one designed to help criminals conduct illegal transactions and launder the proceeds of their crimes.” The indictment also noted that the site was “a financial hub of the cyber-crime world, facilitating a broad range of online criminal activity, including credit card fraud, identity theft, investment fraud, computing hacking, child pornography, and narcotics trafficking.”

Liberty Reserve is believed to have more than a million users worldwide, including more than 200,000 in the United States alone. According to the indictment, the company processed more than 12 million transactions annually “and is believed to have laundered more than $6 billion in criminal proceeds” between 2006 and May 2013.

Collateral damage

However, as in 2012’s seizure and shuttering of Megaupload, there are likely a large number of users that had legitimate assets seized through Liberty Reserve, even if many others were using it for nefarious purposes.

Mitchell Rosetti is the co-founder of ePay Cards—a company that issues “virtual” Visa and MasterCard numbers to people around the world who don’t have access to traditional banking services. ePay Cards accepts payment via Western Union, Moneygram, or Liberty Reserve, and after taking a fee, it issues a “virtual card.” A $100 Visa card, for example, would cost a customer $118. But Rosetti told Ars that “70 percent” of the company’s business came via Liberty Reserve and that the company is now at serious risk of collapsing.

“We are now looking for alternative methods of payment,” he said. “We have not emitted any real quantity of cards since Friday. Further, our monies were seized. Liberty Reserve had $28,000 of ours. We have not yet investigated that situation. Given that this happened on Friday, it’s unraveling today. We’re looking at all of our options.”

Rosetti added that his typical customers were “unbanked” and lived in Latin America, Southeast Asia, or sub-Saharan Africa. They often would use these prepaid Visa accounts to pay for various online services, such as items on Google Play or Facebook.

“For my customers, given the low amount that we take, it wasn’t a concern [that people would use our company for fraudulent purposes],” he said. Rosetti added his company hasn't been contacted by any federal agency, and he hasn't retained the services of an attorney to try to regain his company’s money. He went on to detail more about his company's mission and why it's unfair to lump ePay Cards in within potential fraudulent Liberty Reserve users:

Rarely have we had individuals that will send us $2,000. If something like that would happen, every red flag would go up. That could be a year’s income in some nations. My customer is someone who is unbanked and lives in Chile, Argentina, or Peru and doesn’t make that much money. So why is this individual coming to us? We practiced Know Your Customer practices. I can tell you what my customers were transferring to me: $15, $23, $38. It goes up to $300. But up there it costs you [$35 or $40]—we did that on purpose to dissuade you to load that much money. Why aren’t you doing this through a bank? We’re not venture-backed. Whatever was lost came out of my pocket at this point. And it hurt. It hurts to be associated—they had millions of customers. I know for a fact that there’s a lot of people using this for Web hosting. Being put into this group of pedophiles and drug kingpins—it’s not a nice thing.

Jennifer Queliz, a spokesperson for United States Attorney’s Office for the Southern District of New York, told Ars that persons or companies who believe they are in a situation similar to ePay Cards can call (888) 238-0696 or (212) 637-1583 for more information.