U.S. prosecutors have indicted the operators of digital currency exchange Liberty Reserve, accusing the Costa Rica-based company of helping criminals around the world launder more than $6 billion (USD) in illicit funds linked to everything from child pornography to software for hacking into banks.

The indictment unsealed on Tuesday (May 28) said Liberty Reserve had more than a million users worldwide, including at least 200,000 in the United States, and virtually all of its business was related to suspected criminal activity.

Officials said authorities in Spain, Costa Rica and New York arrested five people on Friday (May 24), including the company's founder, Arthur Budovsky, and seized bank accounts and Internet domains associated with Liberty Reserve.

The indictment detailed a system of payments that allowed users to open accounts with little information and move money around with anonymity.

The U.S. Treasury named Liberty Reserve under the USA Patriot Act as a company "specifically designed and frequently used to facilitate money laundering in cyber space."

That designation, the first against a virtual currency exchange, prohibits banks or other payment processors from doing any business with Liberty Reserve, even if it should reopen under a new name.

The company processed around 12 million financial transactions per year. Since it began operating in 2006, the indictment said, Liberty Reserve laundered over $6 billion in criminal proceeds.

On Tuesday, the company's website, www.libertyreserve.com, displayed the message: "This domain name has been seized by the United States Global Illicit Financial Team."

Presented by Adam Justice