Crime Investigation: Global Drug Cartel Laundered Millions of Dollars Through Binance
Major cryptoasset exchange Binance was reportedly used by a Mexican-based internationally-operating drug cartel to launder millions of US dollars - and the exchange helped the authorities identify the suspects.
Forbes cited an ongoing investigation by the US Drug Enforcement Administration (DEA), saying that a gang dealing in methamphetamine and cocaine, which operated across countries and continents - specifically, the US, Mexico, Europe, and Australia - used Binance to launder their drug proceeds.
The report said that,
"Between $15 and $40 million in illicit proceeds may have been funneled through Binance, the DEA alleged."
The group in question remains unnamed, but the report cited a search warrant per which it is identified as a Mexican gang. They have allegedly been using Binance since 2020. At the time, several DEA informants using the crypto trade forum localbitcoins.com conversed with a user who offered to exchange crypto for cash.
The method was as follows: the person would send bitcoin (BTC) or USD coin (USDC) to the seller’s account and then meet in person to take the cash. The trader was identified as Mexican national Carlos Fong Echavarria, who would reportedly claim that the cash came from "family restaurants and cattle ranches."
The DEA went on to surveil the suspected cash couriers, while at the same time, an undercover agent was in direct contact with Echavarria. That way, the agency tracked the money back to drug sales.
Echavarria was arrested last year, and he pleaded guilty to two charges in August: drug dealing and money laundering. He is yet to be sentenced.
Meanwhile, while Echavarria was being prosecuted, the DEA worked directly with Binance to track his crypto. This is what they found:
Matthew Price,
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