Drug Trade Proceeds Laundered Through Digital Currency ATMs, Says DEA

According to the U.S Drug Enforcement Administration’s report, digital currency ATMs are growingly used to launder the funds gained through the means of the drug trade. 

The law enforcement authorities said in a news report that the drug traffickers and drug traders are turning to the use of digital currency ATMs to transfer illegal money while avoiding detection. 

The report, in particular, points out the spike in the withdrawal of Bitcoin from merchants on the dark web in 2020. This was considered a response to the concerns over the loss caused by the fluctuation in digital currency prices. 

The Drug Enforcement Department also pointed out that during the COVID-19 lockdown, there has been a delay in some shipments which caused funds to be held a little longer in escrow. This also caused greater exchange risks against fluctuation in the market. 

AVAILABLE NOW! #DEA’s 2020 National Drug Threat Assessment a yearly review of the challenges communities face related to drug abuse & drug trafficking. Highlights include usage & trafficking trends for Rx, illegal & synthetic drugs, & the effect of #COVID19 during early 2020.

— DEA HQ (@DEAHQ) March 2, 2021

The border restrictions between the USA and Mexico due to the pandemic have also played a vital role in disturbing the flow of illicit cash cross borders physically. This pushed more criminals to use the means of digital currency and ATMs as a way to launder their illicit money as an alternative. 

Digital currency allows the dealers to send virtual currency immediately. This would minimise the risk that comes with holding and transferring a large amount of fiat currency.

According to the DEA, “some $1.7 billion in digital currency was spent on online darknet markets in 2020, of which illegal drugs form a significant part.”

This news has confirmed that DEA becomes another agency that has shown concerns over the use of digital currency like bitcoin in illicit activities in the USA. Bitcoin has become the first choice of criminals for organized financial crimes. However, it is yet to be discovered if the report will influence any changes in the policy towards digital currency ATMs.