Even El Chapo’s sons are bullish on crypto.
Cartels are using cryptocurrency more than ever before — and the federal agents tasked with catching them are wising up, too.
In interviews with CNN, officials who track cartels explained that although cash remains traffickers’ currency of choice, crypto has gained traction because, as IRS Cyber and Forensics Services head Jarod Koopman notes, it “eliminates the potential for hand-to-hand transactions.”
This new tech-savvy generation of traffickers seeks to better cover their tracks than the old guard, even going so far as to employ crypto specialists, a senior Drug Enforcement Agency official told CNN. One of the biggest proponents of crypto use, CNN notes, is the Sinaloa Cartel, now controlled by the sons of kingpin Joaquin “El Chapo” Guzmán.
Because the cartels are “very willing to invest in technology,” Homeland Security special agent Scott Brown said, the government needs to do follow suit.
“That’s one of the things that we need to be equally willing to do,” the agent in charge of HomeSec’s investigations unit in Arizona told CNN.
For criminals around the world, crypto is a great way to launder money — and the cartels, it seems, are no exception.
In one recent case unsealed earlier this year by the Justice Department, the Sinaloas were charged with laundering some $869,000 via crypto between August of last year and February 2023. Even that huge amount is likely just a fraction of money laundered based on the syndicate’s profit margins ranging in the hundreds of millions of dollars, the government claims.
That indictment claims that the cartel’s top money launderers had mules gather cash from their fentanyl sources, and then, deposit it into the organization’s crypto accounts.
The borderless nature of crypto also pairs well with the international movements of drug syndicates, the report notes. Fentanyl, for instance, is most often manufactured in China, then packed into powders or pills in Mexico before being shipped to the US. As with traditional trafficking transactions, there are crypto payments made at many of the steps along the way. While the government didn’t reveal its exact methodology, an understanding of blockchain analysis could assist in identifying these multi-agency maneuvers.
While most crypto seizures aren’t “going to get you to Chapo Guzman,” Brown said, each piece of the puzzle counts — and as with traditional criminal enterprises and the investigations into them, aiming to catch the producers and the middlemen can cause the entire operation to crater.
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