Singapore, SINGAPORE – Narcos: Mexico may be less captivating than its predecessor with Wagner Moura only providing a brief cameo as Pablo Escobar but if Netflix needs to dream up another spin-off this could be a godsend. The Columbians seeded the humble beginnings of what was to become the Mexican drug trade in cocaine more than three decades ago, and today it seems that modern drug cartels are using cryptocurrencies to launder their ill-gotten gains through OTC using Bitcoin (BTC) and other cryptocurrencies.
This is the concern of the Office of Global Drug Enforcement at the US Drug Enforcement Administration (DEA) during a recent congressional hearing into border security at the Mexican border. Yes, it’s the DEA again and famously years since Ross Ulbricht’s Silk Road was dismantled unceremoniously by the FBI, there are new episodes of individuals using cryptocurrencies to do very bad things despite language barriers. DEA Deputy Chief of Operations Paul Knierim says that the “participation of Asian money launderers has become more prominent in some areas”.
He adds that the “shift towards Chinese and Asian money launderers is believed to be, in part, due to the natural relationship created by the large volume of both licit and illicit trade goods and chemicals imported from China. The use of an Asian money broker simplifies the money laundering process and streamlines the purchase of precursor chemicals and paraphernalia utilised in manufacturing drugs for street sales.”
Simply, it was mentioned that US$60 million in annual drug sales is conducted Stateside and that Janice Ayala, director of the US Department of Homeland Security’s Investigation Joint Task Force chimed in about the existence of Chinese transnational criminal organisations (TCOs) – yes, they get their own abbreviation that cleverly sounds like some new way of doing ICOs – and fingered these TCOs for a “recent significant increase in money laundering using cryptocurrency.”
Counterfeit Chinese foreign identities were probably gleefully remitting laundered funds back to their hombres in Guadalajara Or Tijuana? The best scriptwriters can’t make this up as seizures of cash has declined, so it’s got to be crypto right? The Chinese can’t send more than US$50,000 out of the country each year, so there’s a reliance on another abbreviated Chinese Underground Banking Systems (CUBS) to play brokers to convert those crypto-to-fiat (and vice versa) transactions on the tightrope of capital controls.
And for the love of Barry Seal, there were no mention of planes and nothing about Narco-submarines if you’re wondering. These new partner in crimes are using BTC with OTC because it’s the clever way to do so and shady exchanges that don’t care who are using their platforms. These CUBS sell BTC to the likes of people who used to bury thick wads of cash in the garden after tirelessly getting them back from the US and other countries. Now, it’s just crypto mules conducting some well natured peer-to-peer trading.
The article ends with a story about Japanese money launderers who reemphasized the use cases for privacy coins affectionately termed ZDM to indicate the trio of Zcash, DASH, and Monero. Although unrelated to the Mexicans there was a Chinaman playing a central role in the shenanigans. They also called out YoBit exchange that’s purportedly operated by Russians. Collectively, this alludes that the DEA might just be scratching the surface of how funds are flowing back to the cartels and other international crime organisations like them.
Let’s hope that the DEA keeps an eye out for these TCOs working with CUBS to work those OTC counters. And that it’s not just BTC they should be keeping track of as the sheer clandestine nature of ZDM would indicate that coke driven in by trucks through the Southern Border is not what President Trump’s beautiful wall is going to prevent. And that’s the abbreviated gist of that once again that crafty criminals are pioneering real-world crypto use cases.