Bitcoin Anonymity Facilitates Illegal Financial Transaction For Mexican and Colombian Drug Trafficking Cartels

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WAX news

Cash has always been king in illegal activities.  The problem is that sometimes it is hard to move around.  It also does not allow for fast and long distant transaction.  Welcome to todays digital currency age where that problem has found its fix.

According to a recent report, some of the notorious Mexican drug cartels are increasingly using bitcoin for their illicit operations. Among these organizations are Jalisco New Generation Cartel and Sinaloa Cartel.

Drug Kingpins Turn to Bitcoin

Despite their various merits and numerous proponents, cryptocurrencies have their opponents, too. Those often claim that criminals use bitcoin and the altcoins in illegal activities such as drug trafficking, money laundering, terror financing, and more.

In its most recent report, the United Nations Office on Drugs and Crime (UNODC) revealed that digital assets had become an attractive financial tool for some Mexican and Colombian cartels.

The agency explained how those gangs incorporate crypto in their activities. First, the drug proceeds are split into small payments to avoid controls. Then, the cartels buy small amounts of bitcoin with it, “obscuring the origin of the money and allowing them to pay associates elsewhere in the world.”

Some of the mentioned criminal organizations include Jalisco New Generation Cartel and Sinaloa Cartel. The latter is one of the largest drug trafficking gangs in the world. For decades it was run by the notorious Joaquin “El Chapo” Guzman, who is currently serving a life sentence in a US Federal prison.

The UNODC suggested that both Mexican and Colombian organized criminal groups “are increasing their use of virtual currency because of the anonymity and speed of transactions.” It is worth noting, though, that bitcoin’s blockchain is entirely transparent, and all transactions are recorded on the digital ledger. As such, they can be seen by anyone with access to the Internet.

With that said, BTC’s nature makes it a highly questionable tool for those trying to facilitate illegal financial transactions.

On the other hand, cash remains the most used payment method in dirty money transactions such as prostitution, buying weapons, and purchasing drugs.

Mexican Crypto Exchanges Connected With the Jalisco Drug Cartel

Last summer, the Financial Intelligence Unit of Mexico (FIU) detected 12 cryptocurrency trading venues that operate without legal authorization.

After conducting thorough research on the matter, the authorities raised suspicions that those trading venues might be related to criminal organizations, including the drug cartel Jalisco Nueva Generación. Nieto Castillo – the head of the FIU – said:

“A fundamental issue will be to analyze cryptocurrencies and their relationship with criminal groups. I am struck by the fact that many of the cryptocurrency platforms are installed in several municipalities in the state of Jalisco.”

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