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Binance News: DEA Uses Exchange to Track Cartel

red image of money laundering with binance logo
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In Binance news, a US Drug Enforcement Administration (DEA) investigation has found that a drug cartel operating in several countries used Binance to move millions of dollars in illegal profits.

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DEA tracks Cartel using exchange in latest Binance news

According to a Forbes report, popular crypto exchange Binance is the subject of a DEA investigation alleging that a Mexican-based international drug cartel used the exchange to funnel millions of dollars in profits.

The report said that the DEA, with help from Binance to identify the suspects, was able to track the gang, which dealt in methamphetamine and cocaine. The gang had operations in the US, Mexico, Europe, and Australia.

The report noted, "Between $15 and $40 million in illicit proceeds may have been funnelled through Binance".

The investigation began in 2020 following a search warrant. Several DEA informants using the crypto exchange localbitcoins.com communicated with users who offered crypto for cash.

The method used by the gang was as follows: a user sends BTC or USDC to the seller's account and then meets in person to take the cash. The DEA identified the Mexican national as Carlos Fong Echavarria.

The report mentioned that the suspect misrepresented the source of the funds, claiming they were coming from family eateries and cattle farms. The arrest was made in 2021 after DEA agents confirmed that the account was used to launder funds.

Matthew Price, Binance's senior director of investigations, told Forbes that the blockchain was key.

He said this was an example of where blockchain transaction transparency "works against criminal actors", adding, "The bad guys are leaving a permanent record of what they're doing."

Binance under the spotlight

The exchange has been under the spotlight lately. However, its CEO, Changpeng Zhao, reaffirmed in a recent tweet that "crypto is not a good tool for illicit activities, unlike cash".

In a May blog post, Binance said that the exchange had helped the US Drug Enforcement Agency seize over 100 accounts connected to illegal drug dealers.

A recent Reuters report also noted that Binance might be the subject of a probe by the US Department of Justice. However, a company spokesperson said any DOJ investigation is fueled by false insinuations.

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ibrahim anifowoshe

Author: Ibrahim Anifowoshe

Ibrahim is a writer with extensive experience writing about the crypto industry. He has reported widely and written educational content on the space.


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