US indicts nine in crypto laundering scheme linked to drug cartels

A massive money laundering network powered by cryptocurrencies linked to international drug cartels has been busted by US federal authorities.

On November 21, a federal grand jury in the Southern District of Florida indicted nine individuals for conspiring to launder U.S. currency and operating an unlicensed money transfer business.

The charges follow a multi-agency operation involving Homeland Security Investigations, the IRS Criminal Investigation Division and the Broward County Sheriff’s Office, which found that the defendants used cryptocurrencies to launder drug money from the United States to cartels operating in Mexico and Colombia. Mid-2020 and 2023.

Court documents reveal that the operation involved coordinating the delivery of cash and cryptocurrency to black market exchanges, with some participants acting as couriers and physically moving the cash between various cities in the United States.

All nine defendants are charged with money laundering and conspiracy to operate an unlicensed money transfer business. Three other people have been convicted so far in connection with the case.

Cryptocurrencies, with their limitless appeal and transactional transparency using tools like crypto mixers, have provided a modern loophole for cartels; has transformed traditional money laundering into a digital operation that is harder to track but just as lucrative.

These schemes are often carried out using cryptocurrency exchanges and shell companies that act as fronts to hide the origins of illicit funds.

In March, a Las Vegas CEO was convicted of using Bitcoin to launder more than $4 million worth of money to cartels in Mexico in 2021. Meanwhile, in 2018, two companies accused of laundering money for Colombian cartels were allegedly using the crypto exchange Bitfinex.

Maximilien Cartier, the French luxury brand’s successor, was also accused in May of laundering millions worth of Komolbian cartel money through over-the-counter USDT transactions.

With the increasing use of cryptocurrencies in such avenues, regulators around the world have increased scrutiny and taken stricter measures to curb illegal activities.