Authorities Struggle in Mexico as Cartels Use Crypto for Laundering Funds
The head of financial intelligence in Mexico has revealed that the law enforcement authorities are low on staff to deal with the increase in the laundering of funds through cryptocurrency by cartels. There has been a major spike in the use of cryptocurrency by criminals to launder their illegally obtained assets.
Santiago Nieto, the head of the financial intelligence of Mexico has talked to Reuters in detail about the process of money laundering through the use of the crypto assets. Nieto explained that Mexican cartels will deposit their illegally gained money into different bank accounts. They will divide the asset into an amount less than $7500 to deposit it in the bank accounts so the banks can file transactions. Then these funds are converted into bitcoins so they can be taken across borders.
A human trafficker, Ignacio Santoyo, was arrested last year. It was reported that Santoyo had gathered $22,000 worth of bitcoins.
A famous Mexican cybercrime network Bandidos Revolution Team’s leader, Hector Ortiz, was arrested. Law enforcement authorities reported that he had used thousands worth of bitcoins.
Head of the attorney general’s office of Mexico, Rolando Rosas, has also reported to Reuters that the country lacks the resources to fight the money laundering crimes fueled by cryptocurrency.
Tomas Alvarez, general director of Volabit’s told Reuters, “It is a mistake […] to assume that since the alerts are generated by a company based in Jalisco, they must correspond to residents of Jalisco […] we have users from all over the country. In fact, most of the reports are not from users who live in Jalisco.”
Earlier this year, a report suggested that there has been a decrease in the seizure of hard cash meaning that the criminal networks are using digital currency for their illegal endeavors.