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The “Dark Side” of Crypto Crime in Latin America, Report
Ricardo Martinez | Feb 28, 2020 | 06:00
A new report by Intsights and Ciphertrace delves into the way cybercrime and crypto intersect in Latin America. The report offered valuable insights into the threat landscape and challenges with enforcement in Latin American nations.
Crypto Plays a Big Part in Latin America Cybercrime
The threat of organized crime, cartels, and sophisticated cyber criminals has made Latin America one of the front lines for fighting money laundering, and terror financing. Ciphertrace and Intsights just released an in-depth report on crypto crime in Latin America.
Latin America differs from places like the US, EU or other developed nations in that it doesn’t have state-sponsored advanced persistent threat (APT) groups. Most cybercrime in Latin American nations is from homegrown hackers.
Cybercrime in Latin America is pervasive, 69% of the population is online with the majority in Brazil and Colombia. Rapid digitization and political and economic instability in the region has led to an explosion of hacking, fraud, money laundering, ransomware and other crimes.
The majority of cybercrime involving crypto revolves around money laundering on P2P or unregulated exchanges, or through crypto mixing services. Ransomware and dark web sales of illicit goods and services are also popular.
Threat finance is evolving in Latin America as organized crime groups turn to cryptocurrency to launder large amounts of money and dive into the dark web to find hackers for hire…criminals are taking advantage of unregulated exchanges that do not require registration information and proof of identification for tracking purposes. These illegal exchanges are appealing to criminal groups that are looking to move large amounts of money through untracked channels.
The report continues,
The method used here is similar to mixers, where the actor will deposit Bitcoin into the exchange account and trade it for various Altcoins. Each time a trade is made, it further distances that original payment from its source account.
Many Latin American economies are cash-based, and have lax or nonexistent AML/KYC regulations, which are not regularly enforced. Carding or credit card fraud is also popular, and we have even seen cartels team up with hackers for elaborate cybercriminal schemes.
Widespread corruption makes enforcement tough
Drug trafficking cartels and cyber criminal groups have started turning to crypto to launder large sums of ill-gotten funds. Much of this money laundering happens on peer to peer exchanges like Localbitcoins.
On regulated crypto exchanges and financial institutions such as banks, we see enforcement of AML/KYC hardly enforced due to widespread corruption and the ability of criminal gangs to pay bribes with illicit funds.
Criminals utilize dark web sites and marketplaces, but they also use clearnet sites like Facebook, Whatsapp groups, Telegram chats and other social media. These platforms help them to stay in communication, share intel, ransomware and make sales of illicit goods and services.
Many Latin American nations are at the top of the list for money laundering nations, and even though some have passed regulations to restrict the illicit flow of black market funds, crypto makes it easy for criminal groups to launder money still.
Are you surprised by the findings in this report on Latin America? Let us know in the comments below!
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