Mossack Fonseca Panama Papers
Panama-based Mossack Fonseca law firm has been hit by a massive leak of confidential documentsRodrigo Arangua/AFP/Getty

One of the biggest data leaks in history has lifted the lid on how world leaders and top officials hide their cash in offshore accounts, with a money trail worth up to $2bn (£1.4bn) leading to a number of Russian President Vladimir Putin's close allies.

While the practice of moving assets to offshore accounts is hardly new nor illegal – there are indeed many legitimate reasons to do so – the extent of the leak has revealed a scandal of epic proportions.

Some 11.5 million documents and 2.6 terabytes of information are understood to have been leaked, making the so-called Panama Papers one of the biggest leak of information in history, larger than the US diplomatic cables released by WikiLeaks in 2010 and the secret intelligence documents disclosed by Edward Snowden in 2013.

The information was drawn from the internal database of Panama-based law firm Mossack Fonseca, one of seven firms that collectively represent more than half of the companies incorporated in Panama.

Panama Papers: The 11.5m document leak explainedIBTimes UK

Established in 1977 by Ramon Fonseca and Jürgen Mossack – the son of a former SS soldier turned CIA spy – the firm boasts a global network employing more than 500 people in 42 different countries across the world.

Mossack operates in tax havens such as Switzerland, Cyprus and the British Virgin Islands, and in the British crown dependencies Guernsey, Jersey and the Isle of Man. It also has a number of franchises around the world, where separately-owned affiliates are granted exclusive rights to use the company's brand.

Among the services it provides, which include wealth management, Mossack incorporates companies in offshore jurisdictions and is the world's fourth-biggest provide of offshore services. The Panama-based firm has reportedly acted for more than 300,000 companies, half of which are understood to be registered in British-administered tax havens, as well as in the UK itself.

On its website, the firm says it specialises in commercial law, trust services, investor advisory and international structures as well as providing help to incorporate and manage Private Interest Foundations.

Soon after the documents were released, the firm issued a statement in which it strongly denied any allegation of wrongdoing adding it has always complied with anti-laundering legislation and it could not be blamed for failings by intermediaries.

Mossack Fonseca director Ramon Fonseca has denied any wrongdoing. He said the firm had suffered a hack on its database and described the leak as "an international campaign against privacy", according to Reuters.