IRS contacts former Liberty Reserve users over seized funds after 2013 shutdown

Six years after the takedown of a notorious digital currency exchange, the IRS is finally moving to return frozen funds. But scammers are already lurking.

, and Administrator

2025 November 12 . 1:18 PM

1 min read

In this picture, we see the coin in gold and brown color. We see some text written as "The United... — In this picture, we see the coin in gold and brown color. We see some text written as "The United States Of America". It might be a money coin. In the background, it is brown in color and it looks like a carpet.

IRS contacts former Liberty Reserve users over seized funds after 2013 shutdown

In a significant development, the U.S. Internal Revenue Service (IRS) has begun reaching out to former users of the defunct digital currency exchange Liberty Reserve. The move comes six years after the U.S. Justice Department seized the platform, which was used to facilitate money laundering and other cybercrimes.

Liberty Reserve, founded by Arthur Budovsky, was shut down in May 2013. Budovsky later pleaded guilty to conspiring to commit money laundering and was sentenced to 20 years in prison. The platform processed an estimated 55 million financial transactions worth over $6 billion, with more than 600,000 accounts linked to U.S. users.

The IRS is now working to vet claims made by former Liberty Reserve users to facilitate the return of seized funds. However, users must be cautious of potential scams. Fraudsters may attempt to exploit the situation by promising to return funds in exchange for a processing fee.

The IRS's action signals a step towards justice for those affected by Liberty Reserve's illicit activities. While the total government amount planned for repayment and the authority receiving the frozen funds remain unclear, former users are advised to stay vigilant against potential scams and cooperate with legitimate authorities.