According to the US Department of Justice Drug Enforcement Administration (DEA), drug dealers steadily relied on crypto ATMs to support illegal bulk money transfers last year.
DEA also observed a spike in the BTC withdrawal of a number of dark web vendors last year who feared “loss of funds.” DEA said that Covid’s lock-downs in 2020 slowed opioid shipments, allowing funds to sit in circulation for prolonged stretches of time, which could devalue until sellers were able to cash out.
In the midst of the pandemic, boundary barriers between the US and Mexico, in particular, limited physical cash flow. With money trapped with US-based smugglers, using crypto ATMs has become one way for drug sellers to move funds.
It should be remembered that even crypto ATMs are required to comply with AML laws close to those of other financial services companies. DEA claimed that some crypto ATM owners are helping to blur cocaine profits and are “traffickers” incorporating cryptocurrency into the TBML money laundering sector.
Investigators have discovered that after significant amounts of cash are transferred to crypto by these ATMs; the cash in the system is then “integrated into the income pool” of the owner of the ATM to apparently “mask the origin of the funds.”
Such crypto ATMs used to promote crimes are mostly low-key and exclusively used by ‘money launderers and couriers.’ In addition to being “unlisted,” these ATMs will not be available for general use.
There are about 13,775 Bitcoin ATMs in the United States. The article did not list any particular number of ATMs involved in the suspected activity. However, the 2020 National Drug Threat Assessment, released 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 exchanges offering illicit products and services earned a total of $1.7 billion worth of cryptocurrencies. Residents based in the US alone have sent $115 million to darknet markets and earned $64 million. Overall, the overall amount of people sending to or obtained from darknet exchanges in the US is $179 million.
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