Global drug cartel used Binance to launder millions, the DEA says – Markets Insider

  • A global drug cartel allegedly used Binance to launder tens of millions, an ongoing DEA investigation alleges.
  • Roughly $15 million to $40 million in illicit profits could have been funneled through Binance, according to Forbes, which obtained a search warrant.
  • Here’s how the largest crypto exchange in the world is reportedly working with investigators.

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A global drug cartel used Binance to funnel millions of the gang’s illicit profits, an ongoing US Drug Enforcement Action investigation alleges.

Between $15 million to $40 million has been laundered through the largest cryptocurrency exchange in the world, according to Forbes, citing a search warrant it obtained.

Binance, which announced plans earlier this year to buy a minority stake in Forbes, is working with investigators to help track down suspects.

The investigation into the cartel’s use of Binance began in 2020, when DEA informants on a different crypto trading platform found a user offering cryptocurrency in exchange for fiat currency, Forbes reported. 

The DEA found one culprit, Carlos Fong Echavarria, who later pleaded guilty the charges that included money laundering and drug dealing. Binance assisted the agency by tracking Echavarria’s trading activity on the blockchain, which totalled $4.7 million. By following on-chain activity, they were able to identify an additional account getting funds from Echavarria, per the warrant.

Another account holder, who hasn’t been formally charged, allegedly bought nearly $42 million worth of cryptocurrencies, with at least $16 million being from drug money. 

“This is actually an example of where the transparency of blockchain transactions works against criminal actors,” Matthew Price, the senior director of investigations at Binance, told Forbes. “The bad guys are leaving a permanent record of what they’re doing.”

Earlier this year, Binance also helped the DEA in the agency’s effort to seize over 100 accounts connected to laundering in Mexico.

Meanwhile, Binance is reportedly facing a probe from the US Department of Justice of its own, according to Reuters, citing four sources familiar with the matter. The report described the company’s books as akin to a “black box,” where not even Binance’s former chief financial officer had full access to accounts during his almost three-year tenure.

In a statement to Reuters, Binance’s chief strategy officer said the report’s analysis and depictions of its business units were “categorically false.” 

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