U.S. Authorities Uncover Major Crypto Money Laundering Scheme Tied to Drug Cartels

U.S. federal authorities have dismantled a significant money laundering network using cryptocurrencies to funnel illicit funds for international drug cartels. On November 21, a federal grand jury in the Southern District of Florida indicted nine individuals on charges of conspiracy to launder U.S. currency and operating an unlicensed money-transmitting business.

The indictments follow an extensive investigation led by multiple agencies, including Homeland Security Investigations, the IRS Criminal Investigation Unit, and the Broward County Sheriff’s Office. The defendants allegedly used cryptocurrencies to launder drug money between 2020 and mid-2023, sending funds from the U.S. to cartels based in Mexico and Colombia.

Court documents reveal a complex operation involving the transfer of cash and cryptocurrency through black-market exchanges. Some participants acted as couriers, physically transporting cash across various U.S. cities.

All nine individuals face charges for conspiracy to commit money laundering and running an unlicensed money-transmitting business. Three other individuals connected to the scheme have already been convicted.

Cryptocurrencies have become a favored tool for cartels due to their global reach and the anonymity provided by crypto mixers. These features make it more difficult for authorities to trace illicit transactions. Cartels typically utilize cryptocurrency exchanges and shell companies to obscure the origins of their funds, effectively modernizing the traditional money-laundering process.

This case is part of a broader trend of increasing cryptocurrency use in illegal activities. In March, a Las Vegas CEO was convicted of using Bitcoin to launder over $4 million in cartel money. In 2018, two companies were accused of laundering funds for Colombian cartels using the Bitfinex exchange.

The growing use of cryptocurrencies in illicit activities has prompted regulators worldwide to step up their scrutiny and implement stricter measures to combat such crimes.