The use of Bitcoin (BTC) and cryptocurrencies to carry out money laundering activities among drug cartels based in Mexico and Colombia is allegedly on the rise.
According to a report published on Thursday by the UN-linked International Narcotics Control Board (INCB), Mexico-based drug cartels “launder an estimated $25 billion a year in Mexico alone,” and remain one of the most well-financed and dominant criminal organizations in the world.
The board said illicit money laundering acts using cryptocurrencies are mostly common among drug cartels including the Jalisco New Generation Cartel and the Sinaloa Cartel.
INCB noted that the cartels find ways to get around the Mexican regulation that stated that crypto exchanges should report transactions above $2,830.
In addition, to avoid transactions on their bank accounts from raising suspicion, the criminal organizations divide their dirty money into little amounts, deposit them into several bank accounts and then use the accounts to continually purchase BTC online to pay their partners.
“Both Mexican and Colombian organized criminal groups are increasing their use of virtual currency because of the anonymity and speed of transactions,” the report said.
INCB representative Raul Martin del Campo said the board is currently “issuing a red alert for countries to come to an agreement and consider how to better regulate this (cryptocurrency) payment system.
Criminals Exploiting Cryptocurrencies
As cryptocurrencies edge towards mainstream adoption, bad actors have continued to target and exploit the nascent asset class, thereby using it to carry out all forms of illicit acts.
In December 2020, Nottinghamshire Police arrested a 49-year old for alleged money laundering. Last July, the Metropolitan Police Service (UK) seized nearly £180 million ($249 million) worth of cryptocurrencies from a money-laundering operation involving a 39-year old woman.
According to recent data revealed by crypto and blockchain analytics firm, Chainalysis, cybercriminals laundered over $8.6 billion worth of crypto assets in 2021 – a 30% rise from 2020. The analytics firm also noted that cybercriminals have laundered over $33 billion of crypto assets since 2017, with most of the funds washed out via centralized exchanges.
