Drug traffickers ‘increasingly’ used Bitcoin ATMs to aid illicit transfers in 2020

 

According to US Department of Justice’s Drug Enforcement Administration (DEA), drug traffickers increasingly relied on crypto ATMs to aid illicit bulk money transfers, last year. 

DEA also noted a surge in BTC withdrawal of many dark web vendors, last year, who feared “loss of funds.” DEA stated that Covid-imposed lockdowns in 2020 delayed drug shipments, causing funds to remain in escrow for longer periods, which could devalue before dealers were able to cash out.

Amid the pandemic, border restrictions between US and Mexico, in particular, restricted physical cash flow. With money stuck with US-based traffickers, resorting to crypto ATMs became one way for drug dealers to transfer funds.

It must be noted that even crypto ATMs are supposed to abide by AML laws similar to other financial services firms. DEA alleged that some crypto ATM owners assist in obfuscating drug proceeds and are “traffickers”, incorporating cryptocurrency into trade-based money laundering TBML activity.

Investigators also found that after large volumes of cash are converted to crypto via these ATMs; the cash in the machine is then “integrated into the revenue stream” of the ATM owner to apparently “hide the origin of the funds.” 

Such crypto ATMs that are used to facilitate crimes are often lowkey and exclusively used by “money launderers and couriers.” In addition to being “unlisted,” these ATMs can even be unavailable for public use.

There are close to 13,775 Bitcoin ATMs in the United States. the report did not mention any specific number of ATMs that were involved in the alleged activity. However, the 2020 National Drug Threat Assessment, which was published on 2 March stated

The value of the original drug proceeds, now in a virtual form, can easily be transferred to another user of the virtual currency instantaneously, removing much of the risk associated with transporting large amounts of bulk currency. 

In 2020, darknet markets that offer illegal drugs and commodities received a total of $1.7 billion worth of cryptocurrency. Residents based in US alone sent $115 million to darknet markets and received $64 million. Overall, the total value people in US sent to or received from darknet markets is $179 million.

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2021-03-03