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Arthur Budovksy was found guilty of running illegal money laundering firm Liberty Reserve that distributed over $8bn dollars in 'dirty' funds.Reuters

The founder of an online bank that laundered millions of dollars of money for the criminal underworld has been sentenced to 20 years in prison, it was reported on Saturday (6 May). Liberty Reserve founder Arthur Budovsky had been accused of processing more than 78 million financial transactions with a total value of over $8bn (£5.54bn)

Budovsky, 42, was also ordered to pay a $500,000 fine by US District Judge, Denise L. Cote, who also noted that Boudovsky did not express any "genuine remorse", although he had already admitted to one count of conspiring to commit money laundering on January 29, three days before his trial was scheduled to start in New York.

According to Phys.org, prosecutors said that Budovsky ran the Costa Rica-based company and operated an "alternative digital currency" that helped the distribution and storage of funds gained by various illegal activities.

The company had been branded a 'financial hub' for Ponzi scheme operators, credit card traffickers, identity thieves, hackers and other criminal occupations. Operating since 2005, it was eventually shutdown in 2013 and at the time contained the records of 5.5 million user accounts, of which 600,000 were registered in the US, according to the US Department of Justice.

Liberty Reserve's closure in 2013 caused tremors across the BitCoin world, with the world's largest exchange, MT. Gox, insisting that identity verification would be carried out for currency exchange.

"The significant sentence handed down today shows that money laundering through the use of virtual currencies is still money laundering, and that online crime is still crime," said Assistant Attorney General Leslie R. Caldwell for the Justice Department's Criminal Division, in a statement.

Co-defendants Maxim Chukharev and Mark Marmilev, who also pleaded guilty, were sentenced to three and five years in prison respectively.

"Liberty Reserve founder Arthur Budovsky ran a digital currency empire built expressly to facilitate money laundering on a massive scale for criminals around the globe," US Attorney Preet Bharara for the Southern District of New York was also quoted as saying in a statement.

US shuts Liberty Reserve online bank for money laundering.IBTimes TV