According to the Reuters report, the head of Mexico’s finance ministry’s financial intelligence unit, Santiago Nieto, described how cartels are using crypto to launder money obtained in illicit activities. He described how Latin cartels would typically deposit their ill-gotten gains into various bank accounts as sums of less than $7,500 — the threshold that would prompt banks to flag a transaction. The funds are then used to make a myriad of small quantities of BTC, which can then be transferred without much friction across borders.
Crypto trading platforms have to report transfers exceeding 56,000 Mexican pesos.
A 2018 law requires that registered crypto trading platforms have to report transfers exceeding 56,000 Mexican pesos (approximately $2,800). Local authorities hope this can assist them in responding to organized crime’s use of digital assets. The arrest of human trafficker Ignacio Santoyo last year has been attributed to the law. The authorities identified that Santoyo and his sister had acquired more than $22,000 worth of Bitcoin on the local exchange Bitso.
The accused leader of Mexican cyber-hacking syndicate Bandidos Revolution Team, Hector Ortiz, was similarly arrested after law enforcement identified he had spent “tens of thousands of dollars” worth of Bitcoins, giving investigators a cause to trace his locations using cell phone data.
Law enforcement lacks the resources needed to tackle crypto-fueled money laundering.
Rolando Rosas, the head of the Mexican attorney general’s office’s Cyber Investigations Unit, told Reuters that law enforcement lacks the resources needed to tackle cryptocurrency-fueled money laundering. He said the unit has 120 staff — about a quarter of what is required — and it struggled to keep up with the 1,033 Bitcoin threshold alerts that were triggered on registered trading platforms this year. Crypto-related scams have also increased this year amid the ongoing global pandemic.
