- Venezuelan gangs in Chile are leveraging cryptocurrencies to evade detection and obscure illegal transactions, bypassing the traditional banking system.
- Chilean authorities highlight the need for advanced crypto-asset investigations to counter organized crime effectively.
The rise of cryptocurrency usage among criminal organizations in Chile has become a growing concern for law enforcement. According to Juan Castro Bekios, the Regional Prosecutor of Antofagasta in northern Chile, Venezuelan gangs are at the forefront of this trend, utilizing digital assets to obscure their illicit financial activities.
These groups exploit the inherent privacy features of cryptocurrencies to evade traditional banking systems and launder money from illegal ventures such as drug trafficking, extortion, and fraud.
Bekios noted that the days when authorities would routinely seize large sums of cash during raids are largely over. Instead, digital currencies have become the preferred medium for transferring and storing illicit funds, offering these organizations an effective way to operate under the radar.
The prosecutor emphasized that this shift necessitates a robust and specialized approach to investigating crypto transactions. He argued that prioritizing such investigations is critical not only for dismantling criminal networks but also for safeguarding the integrity of Chile’s financial system.
The complexities surrounding the investigation of cryptocurrency transactions present unique challenges for law enforcement. Cryptocurrencies, by design, offer a degree of pseudonymity, making it difficult to trace funds back to specific individuals or entities.
Bekios highlighted that this feature is a double-edged sword—while it provides users with greater financial privacy, it is equally attractive to criminal actors looking to hide the origins of their assets.
This underscores the importance of employing advanced blockchain analytics tools and international cooperation to track and analyze these transactions effectively.
Despite concerns raised by prosecutors, recent data suggests that the association between cryptocurrencies and criminal activity might be less significant than perceived. According to analytics firm Chainalysis, less than 1% of all cryptocurrency transactions are linked to illegal activities.
Moreover, their 2024 report revealed that the use of cryptocurrencies in criminal enterprises had decreased by nearly 20% compared to the previous year. Nevertheless, Bekios insists that these figures do not diminish the urgency of monitoring digital currencies, as even a small percentage can represent significant sums when large criminal operations are involved.
The increasing use of cryptocurrencies by Venezuelan gangs in Chile highlights a broader global trend where criminal groups adapt to emerging technologies to outpace traditional enforcement methods. By focusing on crypto-asset investigations, Chile aims to send a clear message: there is no safe haven for illicit money, even in the digital realm.
