Mexican authorities report an increase in the use of cryptocurrencies for money laundering by criminal organizations.
How do Mexican cartels launder the money?
IN report On December 8, Reuters, head of the financial intelligence unit of the Mexican Ministry of Finance, Santiago Nieto, described how cartels use digital currencies to launder money obtained from illegal activities.
Neito says Latin gangs typically deposit funds under $ 7,500 in various bank accounts. Why? Because this is the threshold up to which banks do not have to mark transactions. These funds are then used to purchase small amounts of Bitcoin (BTC) that can be seamlessly transferred overseas.
A 2018 law required registered cryptocurrency platforms to report transfers in excess of 56,000 Mexican pesos (approximately $ 2,800). Local authorities hope this can help them respond to the use of digital assets in organized crime.
In April 2019, a trafficker in human beings, Ignacio Santoyo, was arrested. Authorities determined that Santoyo and his sister acquired Bitcoin for over $ 22,000 on the local Bitso exchange. Hector Ortiz, head of the Mexican hacker group Bandidos Revolution Team, was also arrested after law enforcement said he had spent “tens of thousands of dollars” on BTC. This gave investigators a reason to track his location.
Law enforcement authorities lack resources
However, Rolando Rosas, head of the Cyber Investigations Department at Mexico’s Attorney General’s Office, said law enforcement lacked the resources needed to tackle money laundering. The unit only has 120 employees – about a quarter of what is required – and this year it had to deal with 1,033 submissions from registered marketers.
About 98% of the transactions were reported by Volabit – the stock exchange operating in the home state of the Jalisco New Generation Cartel – Jalisco. Volabit CEO Tomas Alvarez said:
“A mistake […] the assumption is that since the alarms are generated by a company based in Jalisco, they must respond to the residents of Jalisco […] we have users from all over the country. In fact, most reports are not from users based in Jalisco. ”