Mexican authorities also have their sights set on “Bandidos revolution team”, a gang federal prosecutors suspect of stealing millions of dollars through cyber attacks on large banks. Moreover, when making his transactions via a registered platform, Santoyo left personal details including his phone number and address.īetween May and November 2018, Santoyo and his sister acquired some 441,000 pesos ($22,260) in bitcoin between them on Bitso, a trading platform in Mexico and Argentina, according to government records seen by Reuters.īitso, one of 11 registered crypto trading platforms in Mexico, declined to comment. In Santoyo’s case, authorities who had been pursuing him for months said they finally tracked him down after he bought enough bitcoin to trigger an alert under the new law.
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They then use those accounts to buy a series of small amounts of bitcoin online, he added, obscuring the origin of the money and allowing them to pay associates elsewhere in the world. The threshold for banking transactions that raise red flags is $7,500. UIF chief Nieto said criminals typically split their illicit cash into small amounts and deposited them in various bank accounts, a technique known as “smurfing”. Putting it into banking systems geared to detect dirty money is perilous, too. Cash is heavy, and transporting it exposes traffickers to high risk. The only thing tougher than smuggling drugs across borders is getting the profits back to cartels, officials say. In Mexico, the hope is that the new rules will help snare big fish. Yet larger sums have begun to crop up across the region over the last three years, with a team of international police breaking up three Colombian drug gangs laundering millions of dollars via cryptocurrencies, authorities say. They represent a drop in the ocean compared with organized crime’s hard cash laundry - estimated at $25 billion a year in Mexico alone, according to the government and financial-intelligence firms. The sums involved in the few cases uncovered are typically thousands or tens of thousands of dollars. Mexican President Andres Manuel Lopez Obrador has faced record levels of gang-fueled violence during his first two years in office, and the prospect of cartels hiding their profits in lightly-regulated spaces is a major concern. It was passed in 2018 but it took many months to implement the system, which is still a work in progress.īitcoin’s use to launder money is particularly increasing among drug gangs such as the Jalisco New Generation Cartel (CJNG) and the Sinaloa Cartel of captured kingpin Joaquin “El Chapo” Guzman, U.S. The law requires all registered cryptocurrency trading platforms to report transfers above 56,000 pesos ($2,830). Santoyo’s arrest represented an early success for a new law in Mexico - one of only two nations in Latin America, with Brazil, to enact such legislation - that seeks to tackle the intractable problem of how law agencies can track the use of bitcoin and other cryptocurrencies designed to anonymize users. The Mexican attorney general’s office declined to comment while the case remained open. Neither Santoyo, who is in custody, nor lawyers representing him could be reached for comment, and they have not commented publicly on the case in the past. and the pandemic is accelerating it,” said Santiago Nieto, head of the Mexican finance ministry’s financial intelligence unit (UIF). “There’s a transition to committing crimes in cyberspace, like acquiring cryptocurrencies to launder money. The cryptocurrency is emerging as a new front in Latin America’s struggle against gangs battling for control of vast criminal markets for sex, drugs, guns and people, according to law enforcement authorities. Yet it was not the 2,000 women Santoyo is alleged to have blackmailed and sexually exploited that ultimately led to his capture, but the bitcoin he is suspected of using to help launder the proceeds of his operations, officials said. FILE PHOTO: An employee is reflected as she cleans the screen of a Bitcoin ATM in a shop in Mexico City, Mexico December 3, 2020.
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