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Liberty Reserve Reviewed
About Liberty Reserve
Liberty Reserve is a digital currency and online payment system with similarity to Paypal, E-Gold, Pecunix, E-Bullion and other E-Currency services. You can send or receive money to or from anyone in the world and unlike Paypal, Liberty Reserve payments are 100% irrevocable, meaning once a payment is sent there is no repudiation policy.
Contrary information sources such as Wikipedia and About.com, Liberty Reserve is incorporated in Costa Rica, not Panama. Their servers are operating in Holland, which is good for a digital currency to have their servers operating outside of the United States. It is unclear where Liberty Reserve’s actual offices of operation are located which is a definite negative for any company wishing to process large business to business transactions. It is also unclear if they hold any licenses to conduct transactions with US citizens or if that is necessary for a Costa Rican based corporation.
Funding a Liberty Reserve Account
As with many digital currencies, Liberty Reserve does not accept direct transactions to and from their system. Accounts are funded or cashed out using an exchanger, and quite a few reputable exchangers accept exchanges of Liberty Reserve. Additionaly, the exchange rates for Liberty Reserve are currently much more feasable than other e-currencies such as Pecunix. This fact makes Liberty Reserve seem to be a viable option for smaller webmasters who are primarily selling advertising or service on their websites.
My Opinions on Liberty Reserve as an Online Business Owner
Liberty Reserve claims to be protected by an offshore trust, and claims at all times to be backed 100% by US dollars for LR-USD accounts, and by gold for LR-gold accounts. However, there is no information provided regarding contact details for the offshore trust, and there is no information regarding the amounts of gold bullion or where the bullion is stored such as is available in plain view on E-Gold’s website. The fact that Liberty Reserve claims to be “backed by gold” but does not provide an examiner and/or summary results such as other digital gold currencies (DCG’s) will cause a significant lack of credibility amongst those wishing to store digital gold with them. The fact Liberty Reserve hides it’s physical office address, does not publish their business contact details and has domain registration privacy on their whois information is another reason to make me wary of utilizing them as a payment option for anything other than small transactions when there is no other option.
The fact that Liberty Reserve, like E-gold and other processors, has a non-repudiation policy and transactions are 100% irrevocable, I don’t see many brick and mortar merchants selling hard goods using the system because quite honestly, I don’t think many people are going to pay for a $4000 Plasma TV or a $600 iPhone with Liberty Reserve funds.
My Opinions on Liberty Reserve’s Design and Implementation
Liberty Reserve’s user interface is simple and easy to use, and it is reminiscent of AlertPay’s interface. The login process is a two step process and Liberty Reserve does seem to have covered the bases as far as providing a secure interface somewhere in between the simplicity of E-Gold and the complexity of Pecunix. They provide an intuitive SCI/API for merchants wishing to easily add Liberty Reserve as a payment option to their websites, and within a few minutes we had the merchant’s interface up and running on one of our test sites.
Overall, Liberty Reserve looks promising if they would just pony up the contact details and the details regarding the amounts of gold bullion in their posession. Until that happens, I’d have to give them a 5/10 rating because when dealing with monetary exchange systems, payment processors and/or digital currencies; transparency is absolutely necessary to facilitate a trust of the system.
If you are interested in opening a Liberty Reserve account, please visit their website : Liberty Reserve
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by mark herpel
Great post, it seems lots of DGC stuff will withdrawing in a cloud of ‘vagueness’ as this year progresses. LR was originally inc’d in Panama they must have changed it.
Mark
by C4G
I noticed that they were originally in Panama, but have changed to Costa Rica. I was checking out some information on offshore incorporation and tax havens and it seems Costa Rica is stepping up with legislation regarding “specifically” e-payment processors. As a surfer (in the water not on the web), I’ve been to Costa Rica several times, and I have several Real Estate broker friends who recently moved from Florida to Costa Rica to take advantage of the booming Real Estate market down there and the Costa Rican government is actively hiring programmers and database engineers from the US (and offering generous compensation).
The country seems to be putting together an interesting infastructure and if you can read Spanish, it’s well worth having a look at the Registro Público (Public Registry) website (and follow links from there)…
http://www.registronacional.go.cr/
Regarding all the Costa Rican offshore, you really must be bilingual and read Spanish as well as English and know how to search in Spanish. I tried to find the site in Google using English keywords, but only got real estate brokers, but when I used Spanish, there was a great deal more info.
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About Liberty Reserve, I personally like them so far. The only issue I really want/need to know is if the principals reside in the US and/or if their corporate offices are located in or outside of the US. Plus, I really think they should post a contact phone number and have some details on the buillon in their posession.
by James
I think, when e-gold was closed, Liberty Reserve have take hight popularity
by Kathy
Well, not sure what happened. My $98.53 disappeared to me-gold. Someone figured out a way to hack my account. IT has been over 48 hours, LR has not step up and response to my email. IT is disappointing LR allow hacking to allow and fail to take proper procedure ot follow up on this situation.
I have never given out my password to anyone. Attempt to change password is rahter disappointing. All one can change is the digital portion, not the other one.
by Faiz
Good informative post on lr. I have read that many people are starting to use this service and like it.
There will be some bad cases with every company and Kathy is one of victims. Sad to hear it.
by GDI
LR has treated me well so far. Their website seems to be professionally run, customer service is friendly and transactions have been 100% accurate and immeidiate. The exchangers seem to be willing to exchange LR into anything you wish with relatively low fees. Seems like a good system for international business.