The International Consortium of Investigative Journalists (ICIJ), a global network of hundreds of journalists who have helped shed light on major money laundering operations such as the Panama Papers, turned to cryptocurrency and uncovered a nearly inexhaustible trove of iniquity.
ICIJ’s investigative crypto reporting series, dubbed Coin Laundry, has shown how illicit funds are funneled through major exchanges such as Binance, OKX, Coinbase, Kraken, Bybit and Kucoin.
The crypto funds tracked by ICIJ were linked to criminal enterprises around the world, including North Korean hackers, Chinese and Russian criminal gangs focused on human trafficking, the trafficking of drugs like fentanyl, the Mexican Sinaloa drug cartel, as well as “cryptocurrency storefront” operations in places like Ukraine and Dubai.
The ICIJ said its findings demonstrate “how the rise of blockchain technology – coupled with the speed, anonymity and global reach of cryptocurrency transactions – has quietly spawned a shadow financial system that operates faster, darker and beyond the reach of regulators and law enforcement.” »
In practice, this means that a drug cartel, say, can easily use a whole new financial system involving dollar-pegged stablecoins, for example, to move money around, whereas in the past, criminals had to put money in the trunk of the car, according to an analyst ICIJ spoke with.
“For decades, we have shown how hidden money moves through offshore havens. Now we are revealing how the same forces are exploiting crypto markets to move illicit cash in plain sight,” Gerard Ryle, executive director of ICIJ, said in a statement.
“Our investigation raises pressing questions: To what extent are major crypto exchanges complicit in criminal activity? And why are regulators struggling to keep pace with a financial system that thrives on opacity and speed?” he asked.
The world of cryptocurrency trading is scrutinized by several large so-called blockchain analytics firms that track illicit funds and suspicious wallet addresses, many of which are hired to work with the compliance departments of major exchanges. The ICIJ investigations appear to have relied on smaller, independent blockchain detectives to carry out their analysis.
More than 100 journalists from more than 35 countries partnered with ICIJ on the project. Media partners include the New York Times, Le Monde, the Toronto Star, Malaysiakini, The Indian Express and the Australian Financial Review.
Coindesk has contacted Binance, OKX, Coinbase, Kraken, Bybit and Kucoin for comment.
