The Department of Justice in conjunction with the US Global Illicit Financial Team has shut down one of the largest online banking services in the world. Liberty Reserve went dark on Monday evening - the site has since been replaced by a message saying the domain name was seized in accordance with a seizure warrant obtained by the Attorney's Office of New York. Authorities believe the service was responsible for laundering more than $6 billion.

The service converted money into an alternative currency known as Liberty Reserve Dollars which could then be exchanged anonymously. As you could imagine, such a service could easily be used for all sorts of illegal activity which is exactly what the indictment claims took place.

According to the document, the site processed over $1.4 billion in transactions per year. Funds were allegedly used to facilitate narcotics trafficking, identity theft and malware fraud via shell companies in Australia, China, Cyprus, Hong Kong, Morocco, Russia and Spain. One hacker reportedly said he would lose around $25,000 due to the shutdown.

It went from bad to worse for founder Arthur Budovsky as he was subsequently arrested in Spain. Budovsky was indicted for illegal money transmittal back in 2006 under a different company called GoldAge. He later renounced his US citizenship and relocated to Costa Rica to start Liberty Reserve. An unnamed citizen of Russian origin was arrested in Costa Rica as well.

The Department of Justice plans to eventually extradite both men to the US to face trial.