Drug cartels are turning to Chinese cryptocurrency gangs to launder criminal cash, according to US law enforcement agencies.
Organised crime groups are stepping up operations with Chinese transnational criminal organisations (TCOs), claim officials from a recent US congressional hearing into Mexican drug cartels and border security.
Paul Knierim, deputy chief of operations for the Office of Global Enforcement at the US Drug Enforcement Administration (DEA), said: “The participation of Asian money launderers has become more prominent in some areas.
“The shift toward Chinese and Asian money launderers is believed to be, in part, due to the natural relationship created by the large volume of both licit and illicit trade goods and chemicals imported from China.”
“Significant increase”
“The use of an Asian money broker simplifies the money laundering process and streamlines the purchase of precursor chemicals and paraphernalia utilised in manufacturing drugs for street sales,” said Knierim.
Janice Ayala, director of the US Department of Homeland Security’s Investigations Joint Task Force, added there has been a “recent significant increase in money laundering using cryptocurrency.”
Crypto is only a tiny part of the multi-trillion dollar global laundering operation, but it is growing, US authorities claim, because it is easy and anonymous.
Last week a fraud detective released advice for fellow police officers about the criminal uses of cryptocurrency.
Detective Joshua Lee, a fraud and organised crime expert in the Mesa Police Department in Arizona, says there is a lack of awareness among officers about the use of crypto in the drug trade, child pornography, and other criminal enterprises.
He said: “Cryptocurrency is not a fad, but a complex and serious issue that is here to stay.
“Lack of regulations, the ability to remain anonymous, and untrained police agencies only encourage criminal behaviour in the digital environment.
“Recognising and documenting basic cryptocurrency issues in your jurisdiction will help your agency take the first step needed to investigate cryptocurrency crime.”
Authorities throughout the world are stepping up powers to prevent money laundering using cryptocurrencies.
Ireland recently introduced powerful new laws to target criminals using crypto to conceal their illicit profits.
Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.