MEXICO CITY: Drug cartels in Mexico and Colombia are more and more utilizing cryptocurrencies corresponding to bitcoin to launder cash, the UN-linked International Narcotics Control Board (INCB) stated on March 10.
Mexican cartels are estimated to launder US$25bil (RM104.82bil) a yr in Mexico alone, the board’s annual report stated, describing them “as among the richest and most powerful organised criminal groups” on this planet.
“The use of bitcoin to launder money is increasing, in particular among drug gangs such as the Jalisco New Generation Cartel and the Sinaloa Cartel,” it stated.
The criminals make use of strategies to get round a Mexican regulation requiring cryptocurrency platforms to notify authorities of any transaction of greater than US$2,830 (RM11,866), in accordance to the report.
“To remain under the threshold for banking transactions that raise red flags… criminals typically split their illicit cash into small amounts and deposit them into various bank accounts,” it stated.
They then use the accounts to repeatedly purchase small quantities of bitcoin on-line to pay associates.
“According to the Drug Enforcement Administration of the United States, both Mexican and Colombian organised criminal groups are increasing their use of virtual currency because of the anonymity and speed of transactions,” the report added.
The INCB is “issuing a red alert for countries to come to an agreement and consider how to better regulate this (cryptocurrency) payment system”, the organisation’s consultant Raul Martin del Campo instructed AFP in Mexico City.
“States can update and improve their laws on the transparency of transactions,” he added.
“It looks like there’s a no man’s land. As it’s on the Internet, governments sometimes think that they cannot regulate anything,” he stated.
The report voiced concern about illicit monetary flows costing African states US$88.6bil (RM371.49bil) per yr – round 3.7% of their mixed gross home product (GDP).
“Illicit financial flows and corruption undermine foreign direct investment and aid and threaten the continent’s development,” it warned. – AFP