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How criminals launder money using crypto in Latin America

2min Read
Is increasing crypto adoption resulting in rise of cyber crimes?

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Crypto-adoption catalyzed the immediate need for regulation to curb illicit activities such as money laundering. Latin America, for example, holds the largest number of cryptocurrency users in the world but is listed among the world’s worst money laundering nations.

Latin America embraced cryptocurrency but since there are no proper regulations in place, it has become easier for criminals to take advantage of regulatory loop-holes (or lack thereof) to use cryptocurrencies for illegal activities. Unregulated cryptocurrency exchanges don’t require extensive know-your-customer (KYC) and anti-money laundering (AML) policies and mixers.

This is a major problem that needs to be addressed by any country that allows cryptocurrency usage. Additionally, a recent report by IntSights titled “The Dark Side of Latin America,” claimed that criminals in the country targetted peer-to-peer exchanges or mixing services for malicious actions.

The report stated,

“Criminals are taking advantage of unregulated exchanges that do not require registration information and proof of identification for tracking purposes. These illegal exchanges are appealing to criminal groups that are looking to move large amounts of money through untracked channels.”

The report also further stated that organized crime groups in Latin America were turning to cryptocurrency to launder large amounts of money so that they could cover up their tracks. A former Microsoft employee was recently found guilty of stealing over $10 million and laundering using mixers.

These instances strengthen the argument against adoption of cryptocurrencies. It comes as a support to those who argue against the use of virtual currencies stating that they could be easily manipulated and hacked.

The report further talking about how only a handful of countries have employed money-laundering regulations:

“Very few countries have established laws to counter money laundering, which according to researchers is generating that involved use of sharing sites is not regulated or with weak protocols of Know your Customer (KYC) and anti-Money Laundering (AML).”


A Psychology and Journalism graduate, Rakshitha focuses on UK and Indian markets. As a crypto-journalist, her interests lie in blockchain technology adoption across emerging economies.
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