Crypto is Fueling Organized Crime in Latin America, New Report Claims

Michael LaVere
  • Report by intelligence firm Intsights claims Latin American crime organizations are using crypto for money laundering.
  • Researchers found the majority of crypto exchanges failed to implement KYC or anti-money laundering protections.

A new report by intelligence firm Intsights claims that criminal organizations are increasingly using cryptocurrency to fuel their illegal enterprise in Latin America. 

According to the report titled “The Dark Side of Latin America,” Intsights says major economic downturn in Latin America has led to an uptick in money laundering through cryptocurrency. Intsight claims that Latin American countries (LATAM) now top the list for money-laundering and that few exchanges engage in Know Your Customer (KYC) and anti-money laundering (AML) regulations. 

In conjunction with blockchain security firm CipherTrace and LATAM-focused Scitum to issue the report, Insight researchers found the vast majority of Latin American countries fail to impose regulations on cryptocurrency exchanges,

Researchers estimate that after cryptocurrencies have been cleaned on exchanges, 97 percent end up in countries that have extremely lax KYC/AML regulations, with Latin American economies topping the charts.

The report cites Panama-based payment processing firm Crypto Capital as a primary example. In 2019, Crypto Capital was accused of laundering more than $350 million through Colombian drug cartels, leading to the arrest of president Ivan Manual Molina Lee. The firm’s assets were frozen by authorities, which included an alleged $850 million belonging to cryptocurrency exchange Bitfinex. 

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