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Mexican drug cartels use Chinese underground banking system to transact

Legal

www.chepicap.com 13 January 2019 15:00, UTC
  
Reading time: ~2 m

Mexican drug cartels and Chinese suppliers' relationship is backed by the Chinese underground banking system that experts in escaping the laws related to financial matters. 

Mexican drug cartels or more familiar with the name, Narcos, have been related to the Chinese crypto money laundering networks, as revealed in a recent United States Senate Judiciary Subcommittee hearing on Border Security and Immigration.

The relationship was initially started with China being a major supplier of many controlled substances, such as ephedrine and pseudoephedrine, which are required to synthesize Methamphetamine and Fentanyl, which is usually laced with Heroine and Cocaine to make it more potent and deadly.

After years of relationships, both parties have “mastered” the art to escape the law by making use of the legal loophole, particularly crypto-related law when it comes to financial matters.

The financial flow between the two parties involves the complicated network of fiat money and crypto brokers, which is known as the Chinese Underground Banking System (CUBS).

And although the law enforcement agencies are said to have become increasingly savvy when it comes to recognizing illegal financial transactions, the statistics on CUBS’ are still very concerning.

It is predicted to have more than 10,000 clients and launder more than $100 billion every year, with fiat and Bitcoin as the most used medium, as reported by BTC Wires.

Furthermore, the US law enforcement agencies suspect that the recent uptick in money laundering cases that involve crypto is related to CUBS.

Read more: 

Chinese drug trade increases its use of crypto, but governments try to stay ahead

US government agencies tripled their budget to fight crypto-related crimes


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