Criminal investigation: Global drug cartel laundered millions of dollars through Binance

An international drug cartel based in Mexico allegedly used major cryptocurrency exchange Binance to launder millions of US dollars - and the exchange helped authorities identify the suspects. 

 Forbes cited an ongoing investigation by the US Drug Enforcement Administration (DEA), which found that a methamphetamine and cocaine-trafficking gang operating in various countries and continents - notably the US, Mexico, Europe and Australia - used Binance to launder drugs. drug proceeds. 

 The report stated that:

 the DEA alleged that between $15 million and $40 million in illegal proceeds may have been channeled through Binance. 

 The group in question remains anonymous, but the report cited a search warrant that identified it as a Mexican gang. They are said to have been using Binance since 2020. At that time, several DEA informants using the crypto trading platform spoke with a user who offered to exchange crypto for cash. 

 The method was as follows: a person would send bitcoin (BTC) or USD coin (USDC) to the seller's account and then meet in person to collect the money. Carlos Fong Echavarria, a Mexican citizen who claimed the cash came from "family restaurants and ranches," was believed to be the businessman. 

 The DEA continued to monitor the suspected cash courier while the undercover agent was in direct contact with Echavarria. Thus the agency traced the money to drug sales. 
 Echavarria was arrested last year and pleaded guilty in August to two counts of drug trafficking and money laundering. He has not yet been convicted. 

 Binance Helped Track Assets 

 While prosecuting Echavarriale, the DEA worked directly with Binance to track his crypto. Here's what they found:

Matthew Price,  senior director of research at Binance and a former IRS cybercrime agent, said that 

 "This is really an example of how the transparency of blockchain transactions works against criminals. [...] The bad guys leave a permanent record of what they does." 

 The case also shows an operation to launder significant amounts of drug money through cryptocurrency wallets, while previous investigations into Mexican drug cartels only found crypto transactions  in the tens of thousands, not millions. This could indicate that Mexican drug gangs are delving into crypto in an attempt to  hide illegal transactions. 

 However, there is another side of the coin that Price mentioned: the authorities can track the illegal use of crypto. It is therefore likely that  gangs will continue to work with cash and move it  across the border in a major attempt to hide the money trail, the report said. 

 Per Price, 

 "On a larger scale, [crypto-laundering] money and other resources continue to be completely dwarfed by  the amount of money alone." 

 In May of this year, Binance announced that it was working with the DEA to identify and seize more than 100 accounts linked to suspected drug money laundering in Mexico. 

 Ironically, as previously reported  in December, Binance and its CEO, Changpeng Zhao, may face charges of money laundering conspiracy and other crimes in the United States. The allegations were only reported as  a possibility, and opinion was divided within the US Department of Justice (DOJ), which appeared to lead to the conclusion of the investigation into Binance and its top executives.

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