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What led to this man’s arrest was not the 2,000 women he allegedly trafficked, but the bitcoin he used!

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The cryptocurrency community has been building a self-sustaining ecosystem to make users financially independent. On one hand, it has been looked upon as an alternative to the current financial system, on the other, notorious groups have been making use of cryptocurrencies only to have regulators label them a potential threat.

Illicit use includes hacking and demand for ransom in cryptocurrency (more specifically Bitcoin), human trafficking, money laundering, running drug cartels, and distributing drugs in exchange for crypto, are a few use cases that have been gaining momentum. A recent report from Reuters stated that cryptocurrency is emerging as a new front in Latin America’s struggle against gangs battling for control across the vast criminal markets of sex, drugs, and guns.

Cryptocurrency and Drug Cartels

This became evident in 2019 when the Mexican police arrested suspected human trafficker Ignacio Santoyo as they linked him to a prostitution racket extending across Latin America. However, what led to his arrest was not the 2,000 women Santoyo is alleged to have trafficked, but the bitcoin he was suspected of using to help launder from his operations.

The anonymity offered by cryptocurrency had caught the eye of a prominent, Cali Cartel as well. In November, Spanish police arrested a suspected Colombian drug trafficker who allegedly belongs to Cali Cartel. The arrested person was allegedly using cryptocurrency to facilitate his operations.

As the cartel was exposed due to its leaders’ arrest, the unidentified man began a new operation in Europe and became money launder. The anonymous member allegedly set up a cryptocurrency trading company as a front.

Regulators and central banks around the world have been wary about the use of cryptocurrencies in two aspects: which include money laundering and its use for terrorist financing. Arrests of drug cartels for laundering money is increasing by the day and has been threatening the legal existence of crypto. This growing trend was mainly observed in 2020.

Santiago Nieto, head of the Mexican finance ministry’s financial intelligence unit [UIF] noted:

“There’s a transition to committing crimes in cyberspace, like acquiring cryptocurrencies to launder money … and the pandemic is accelerating it.”

A recent Chainalysis report detailed that the use of crypto on the darknet market hit an all-time high in 2020. Darknet marketplaces surpassed $800 million worth of crypto revenues made in 2019. Among the prominent dark web uses of crypto, selling and purchasing drugs were more prominent. COVID-19 caused many active markets to shut down temporarily and even the number of purchases and customers fell significantly.

Cryptocurrency and Regulators

This growing use of cryptocurrency in the hands of drug cartels, human traffickers, and other illicit users could discourage world regulators from looking at crypto as the next step in finance. It would rather make a case for its illegal use in promoting the two problems regulators are trying to curb- Money Laundering and Terrorist Financing.

However, it is worth noting that despite the rise in illegal usage of cryptocurrencies, a ban would only discourage the common people from trying to legally participate in the evolving technology. The use of cryptocurrency or even physical cash is still possible by the notorious groups.


Namrata is a full-time journalist at AMBCrypto covering the US and Indian market. A graduate in Mass communication, while majoring in Journalism, she writes mainly about regulations and its impact with a focus on technological advancements in the crypto space.
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