- Drug trafficking organizations are using Tether (USDT) for cross-border money movement, according to Court Watch reports
- Mexican cartels, including the Sinaloa cartel, are allegedly using USDT for large-scale drug operations
- USDT reportedly trades at a discount in Mexico due to its association with drug proceeds
- U.S. authorities seized over 5 million USDT from three Binance accounts linked to cocaine trafficking
- FBI investigations reveal a $52 million money laundering operation using cryptocurrency brokers connected to Mexican cartels
Drug Cartels Adopt Stablecoins for Money Movement
Recent court documents reveal that major drug trafficking organizations, particularly those operating between Mexico, Colombia, and the United States, have integrated Tether (USDT) into their financial operations. This development marks a shift in how criminal enterprises move money across borders.
According to Court Watch reports, criminal organizations, including the Sinaloa Mexican drug cartel, are using stablecoins for drug trafficking operations. The investigation extends to multiple cases, including one involving a Canadian Olympic snowboarder’s alleged cocaine trafficking ring.
USDT’s Discounted Mexican Market
A notable finding from the investigation indicates that USDT trades at below-market rates in Mexico. An anonymous source states: "The USDT was sold at a cheaper rate in Mexico because it was known to be drug proceeds." The process typically involves purchasing discounted USDT in Mexico and reselling it in Colombia through various channels, including currency exchanges and peer-to-peer transactions.
Law Enforcement Response
U.S. authorities have taken action, with one recent civil forfeiture complaint targeting over 5 million USDT across three Binance accounts. One of these accounts reportedly processed more than $15 million in transactions.
Binance responded to these allegations, stating: "Despite our best efforts, like most companies, we can’t always preemptively stop every bad actor." The exchange emphasized its anti-money laundering measures and monitoring tools.
Tether’s Position
Tether representatives emphasized that these transactions occurred in secondary markets without their direct involvement. They stated: "Unlike fiat currency, which remains the dominant form of funding for criminal and terrorist efforts globally, Tether has the ability to track all transactions and halt USDT whenever it is used in any illicit manner."
Broader Criminal Usage
FBI investigations uncovered a separate money laundering operation between 2021 and 2023, connected to Mexican cartels, that processed over $52 million in drug proceeds. The investigation revealed that criminal organizations are not limiting themselves to USDT, with Bitcoin (BTC) also being used in transactions with Chinese fentanyl producers.
This pattern of cryptocurrency usage in drug trafficking operations isn’t new, with reports dating back to 2020 indicating similar practices. The continued adoption of digital assets by criminal enterprises presents ongoing challenges for law enforcement and regulatory bodies.
Previous Articles:
- Ripple Labs Injects $25M into Crypto Super PAC Fairshake for 2026 Elections
- The AI Lab Partners with Theta EdgeCloud to Power AI Education in South Korea
- Pump.fun Dominates Solana DEX Activity with 62% of November Transactions
- Mango DAO ‘Dies’ After Members Gain Control, Risk SEC Settlement Violation
- MicroStrategy Bulls Eye 10X Bitcoin Value Despite 538% Rally This Year
