Colombian Police Dismantle $42M Crypto Drug Laundering Ring

Key Takeaways

Colombia Announces Eight Detentions Involved in Laundering Money From Drug Trafficking Organizations

Colombia is tightening its intelligence operations to pursue groups that are collaborating with cartels to launder the proceeds of drug trafficking activities using digital assets.

On Wednesday, the Office of the Attorney General of Colombia announced the detention of eight people allegedly involved in these activities in coordination with U.S. intelligence authorities.

The operation involved the deployment of CTI Police officials and the national army in four different locations, including Cajicá, Maicao, Barranquilla, and Bogotá.

In a coordinated action, Guillermo Carpio Cárdenas, known as “Gallo,” the head of the first group, was captured, alongside Alex Alberto Castillo Gómez, Jhon Jairo Torres Peláez, Nizar Hachem Sawan, Andrés Mauricio Guarnizo Vaca, Danilo Andrés Hernández Junco, and Juan Daniel Arenas Uribe (known as Juan Arenas).

The United States District Court for the District of Puerto Rico alleges that this ring organized a scheme to circulate and obfuscate the source of illicit drug-obtained funds using a deposit network, cryptocurrency tokens, and smurfing, a technique that seeks to operate transactions with small amounts to avoid detection by financial intelligence units.

In another action, Nassim Orfale Vasquez was captured in Barranquilla; he was indicted in the United States District Court for the Southern District of New York for his participation in a structure that used cryptocurrency transactions to launder drug trafficking funds.

According to the Internal Revenue Service (IRS), Vasquez processed over $42 million in suspicious cryptocurrency transactions since 2018, and authorities are investigating the existence of a larger organization operating from the Colombian coast dedicated to these tasks.

The Office of the Attorney General of Colombia stressed that those arrested will undergo extradition procedures applicable under Colombian law, respecting due process.

The operation follows the dismantling of a stablecoin laundering network led by Leonardo de Jesus Zuluaga Duque, a Colombian citizen known as “Rey,” who was sentenced to 160 months in a federal prison.

Colombian President Abelardo de La Espriella has prioritized criminal extraditions to the U.S., with a special focus on facing drug trafficking groups, and has been criticized for his hard-line approach toward narco criminals. Nonetheless, he ranks as the third most popular leader in Latam, behind Mexico’s Sheinbaum’s and El Salvador’s Bukele, a longtime bitcoin proponent.