Liberty Reserve IT Manager Pleads Guilty to Money Laundering Charges

Maxim Chukharev, the former IT manager of Liberty Reserve, has pleaded guilty to operating an illegal money transmitting business.

AccessTimeIconSep 24, 2014 at 2:56 p.m. UTC
Updated Sep 11, 2021 at 11:11 a.m. UTC
10 Years of Decentralizing the Future
May 29-31, 2024 - Austin, TexasThe biggest and most established global hub for everything crypto, blockchain and Web3.Register Now

A Costa Rican man who served as the former IT manager for now-defunct early digital currency company Liberty Reserve has pleaded guilty to operating an illegal and unlicensed money transmitting business.

On Tuesday, 28-year-old Maxim Chukharev appeared before US District Judge Denise Cote to enter the latest plea in the case. Six of his co-workers have been charged with crimes related to the operations of Liberty Reserve, and three have pleaded guilty to date.

Prosecutors said Chukharev played a crucial role in maintaining the company’s technological infrastructure, which authorities estimate was used to process $6bn in transactions.

The news marks the latest development in the case of Liberty Reserve, which was shut down in May 2013 following a money laundering investigation conducted by US and Costa Rican law enforcement. The case is still widely cited by US authorities as a reason digital currency companies should be required to perform enhanced due diligence on customers.

Co-founder Vladimir Kats pleaded guilty to a litany of charges in connection with his involvement in the company last November and faces 75 years behind bars.

Chukharev's sentencing hearing is scheduled for 30th January, 2015. He faces a maximum five-year prison sentence.

'Bank of choice' for criminals

The US Department of Justice (DOJ) denounced the company, evoking strong language in an official release, and asserting its belief that Liberty Reserve was created to allow cybercriminals to distribute illegal goods and launder illicit gains.

The statement reads:

"Liberty Reserve was used extensively for illegal purposes, functioning as the bank of choice for the criminal underworld because it provided an infrastructure that enabled cybercriminals around the world to conduct anonymous and untraceable financial transactions."

Liberty Reserve's closure was similarly championed by some early bitcoin advocates, who argued that the shut down would help to decouple the digital currency from connections with illicit businesses.

Impact on bitcoin's perception

Although Liberty Reserve has been inactive for some time, the company has had a lasting impact on the perception of digital currency in the eyes of US law enforcement, owing to its status as one of the largest money laundering prosecutions in history.

The case was notably evoked during New York's 'BitLicense' hearings earlier this year by Cyrus R Vance, Jr, District Attorney of New York County and Richard B Zabel, Deputy US Attorney for the Southern District of New York, who appeared before NYDFS superintendent Benjamin Lawsky to speak about the need for enhanced oversight of digital currency businesses.

In contrast to bitcoin's open network, Liberty Reserve was a closed platform that featured its own native digital currency called the Liberty Reserve or LR. The company has been credited with promoting early interest in bitcoin, as the digital currency was a method used to buy bitcoin at early exchanges.

Image via Shutterstock


Please note that our privacy policy, terms of use, cookies, and do not sell my personal information has been updated.

CoinDesk is an award-winning media outlet that covers the cryptocurrency industry. Its journalists abide by a strict set of editorial policies. In November 2023, CoinDesk was acquired by the Bullish group, owner of Bullish, a regulated, digital assets exchange. The Bullish group is majority-owned by; both companies have interests in a variety of blockchain and digital asset businesses and significant holdings of digital assets, including bitcoin. CoinDesk operates as an independent subsidiary with an editorial committee to protect journalistic independence. CoinDesk offers all employees above a certain salary threshold, including journalists, stock options in the Bullish group as part of their compensation.

Learn more about Consensus 2024, CoinDesk's longest-running and most influential event that brings together all sides of crypto, blockchain and Web3. Head to to register and buy your pass now.