The United States justice system has taken another bold step in sanitizing the crypto sector of bad actors.
US authorities indicted nine individuals for their involvement in a major money laundering scheme where cryptocurrencies are used to launder drug money from cartels in Mexico and Colombia.
On Nov 21, a federal grand jury in the Southern District of Florida indicted nine individuals for conspiracy to launder U.S. currency and operating an unlicensed money-transmitting business.
“According to the superseding indictment, between 2020 and mid-2023, nine defendants and their co-conspirators worked together to pick up bulk cash, derived from drug sales in various cities throughout the United States. They would then coordinate to exchange the cash for cryptocurrency that was sent to wallets controlled by the defendants or their co-conspirators. The cryptocurrency would then be converted into cash and delivered to cartel leaders in Mexico and Colombia.
As alleged in court documents, Nilsson Snyder Vasquez Duarte, a/k/a “Sobri,” a/k/a “Sobrino,” (Duarte), 34, and co-conspirators coordinated the delivery of cash and cryptocurrency to black market cryptocurrency exchangers, including to Hernan Horacio Richard Samper (Samper), 59, Maria Eugenia Landeros Rosas, a/k/a “Yeni,” (Landeros), 52, Raimundo Carlos Rodriguez Huter (Huter), 40, Mayccol Hejeile Morales (Morales), 36, and Hernan Julian Calvo Bueno (Calvo Bueno), 34. Sergio Fernando Vargas Alvarez (Alvarez), 37, Juan Carlos Riano Muentes (Riano), 36, Jesus Ivan Rincon Martinez (Rincon), 45, Morales, and Calvo Bueno also acted as couriers, physically transporting the cash between U.S. cities.
All nine defendants are charged with one count of conspiracy to commit money laundering and one count of the operation of an unlicensed money-transmitting business. Duarte, Landeros, Huter, Rincon, Morales, Calvo Bueno, and Alvarez are also charged with substantive money laundering counts.” The statement from the US attorney’s office in Florida read.
The court documents also reveal that the accused individuals also patronized black market exchangers with some participants acting as physical couriers.
The Role of Crypto mixers in illicit crypto activities
Crypto mixers have become notorious tools popular amongst bad actors in the crypto industry. Crypto mixers like Tornado Cash are often used to scramble transaction trails making it very difficult to trace transactions and associated wallets.
- This feature in conjunction with the anonymous nature of cryptocurrencies has created a perfect weather for illicit activities threatening the reputation of the entire industry.
- According to Crypto. news, in March, a Las Vegas CEO was convicted for using Bitcoin to launder over $4 million worth of funds to cartels in Mexico in 2021.
In 2018, two companies accused of laundering funds for Colombian cartels were allegedly using crypto exchange Bitfinex. Crypto mixers are resourceful tools for crypto money laundering and crypto mixer companies like Tornado Cash have come under fire.
What to know
- The WazirX scammer who made away with $230 million of user funds used Tornado Cash to launder most of the stolen assets.
- Money laundering in crypto is a major headache for regulators in various jurisdictions. Binance founder Changpeng Zhao was jailed for having weak anti-money laundering policies at Binance.
- Money laundering was also mentioned in the recent spat between Binance Limited and Nigerian authorities.