Drug cartels increasingly use Bitcoin to launder money

Mexican and Colombian drug cartels increasingly use cryptocurrencies enjoying the anonymity and speed of transactions they provide.


Drug cartels in Mexico are increasingly turning to the internet, bitcoin and e-commerce to launder money and sell drugs, according to a report released on March 10.

The report of the International Narcotics Control Board said the Jalisco New Generation Cartel and the Sinaloa Cartel are increasingly using bitcoin to launder money.

Cyberspace and cryptocurrencies are emerging as a new frontier for organized criminal groups battling for control of the vast criminal markets for drugs, arms, sex and persons,” the report said. Mexico last November reported drug cartels used online video games to recruit young people.

Mexican cartels are believed to launder about US$25 billion a year in Mexico.

Yet, the government of Mexico since 2018 has required all registered cryptocurrency platforms to report transfers above 56,000 pesos ($2,830).

Criminals deposit cash in multiple bank accounts and make multiple transfers of small amounts in order to remain under the $7,500 threshold raising red flags on banking transactions. This technique is called “smurfing”. Then, they buy a series of small amounts of bitcoin online, “obscuring the origin of the money and allowing them to pay associates elsewhere in the world”.

According to the U.S. Drug Enforcement Agency, “both Mexican and Colombian organized criminal groups are increasing their use of virtual currency,” because they offer “anonymity and speed of transactions”.

Some websites also advertise selling pills like Xanax while they are cut with fentanyl without telling it. Del Campo, a member of the Control Board, said drug cartels are also reviving old recipes for synthetic narcotics that had fallen into disuse because of their side effects.

Last month, at least 20 people in Argentina died because of adulterated cocaine cut with a fentanyl-like opioid, a tranquilizer used on elephants or rhinos.

The INCB also shared concerns about social media that “not only promote negative behaviors related to drug use by glamorizing those behaviors, but also offer users the opportunity to buy cannabis, prescription pain killers and other controlled substances on many platforms.”

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