The DEA believes that between $15 and $40 million in illicit proceeds may have been funnelled through Binance (Picture: Reuters/Dado Ruvic/Illustration)
The US Drug Enforcement Administration (DEA) is investigating a global drug cartel that was allegedly using the popular cryptocurrency exchange, Binance, to launder money.
The cartel trafficking meth and cocaine operating across the US, Mexico, Europe and Australia reportedly used the world’s biggest cryptocurrency exchange to launder tens of millions in drug proceeds.
The DEA believes that between $15 and $40 million in illicit proceeds may have been funnelled through Binance.
The investigation into the unnamed Mexican gang’s use of Binance began in 2020, according to a search warrant obtained by Forbes.
Multiple DEA informants used localbitcoins.com, a crypto trade forum and interacted with a user offering to exchange cryptocurrency for cash.
CEO of Binance, Changpeng Zhao, shared the story on Twitter saying, ‘Crypto is not a good tool for illicit activities, unlike cash,’ (Picture: Reuters/Benoit Tessier/File Photo)
The transaction involved sending a Bitcoin or a ‘stablecoin’ like USDC, to the seller’s account and then meet them to collect the cash in person.
The trader – Mexican national Carlos Fong Echavarria – told them the cash came from ‘family restaurants and cattle ranches’, according to the government’s account.
By surveilling the alleged couriers of the cash, and having an undercover agent deal directly with Echavarria, the DEA said it tracked the money back to drug sales.
CEO of Binance, Changpeng Zhao, shared the story on Twitter saying, ‘Crypto is not a good tool for illicit activities, unlike cash. Blockchains are transparent,’
https://mobile.twitter.com/fuserleer/status/1605829304813703168
One account appeared to be taking money from Echavarria and continuing the laundering process, the DEA said.
In 2021, the owner of that account made 146 purchases of cryptocurrency worth nearly $42 million and sold over $38 million across 117 sell orders, according to the warrant.
The DEA was able to identify the owner of that second account with help from Binance.
Metro.co.uk has reached out to Binance for comment.
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Between $15 and $40 million in illicit funds may have been laundered.
