Money laundering in Mexico is a major problem although the South American nation has taken a number of steps to strengthen its anti-money laundering system. According to the United States authorities, Mexico continues to be one of the most difficult jurisdictions for money laundering, particularly with regard to money laundering operations involving cross-border smuggling of bulk money from narcotics proceeds.
According to a recent study conducted by Mexico’s Financial Intelligence Unit (FIU), financial institutions constitute the biggest risk to money laundering operations compared to cryptocurrency firms. A fresh report by El Economista highlights seven major banks, which it terms as “G7 banking groups,” as the major gutters of illegal funds in Mexico, more than any other financial entity.
Commercial banks launder more money than Bitcoin in Mexico
The “G7 Banking Group” consists of Inbursa, BBVA, Scotiabank, Santander, HSBC, Citibanamex, and Banorte. These banks control nearly 80 percent of all the resources within the Mexican financial sector. Nonetheless, the FIU did not provide statistics on the potential losses by financial institutions involved in money laundering in its latest National Risk Assessment report.
According to Santiago Nieto Castillo,the head of the financial crimes unit in Mexico, “Derived from the applied methodology, the multiple banks, made up of the seven largest banks in Mexico, is the sector most likely to be used to carry out money laundering operations.”
Furthermore, the report also pointed out that traditional financial entities like foreign exchanges and brokerage firms were earmarked as “highly risky.”
Crypto exchanges and digital assets are “emerging threats”
However, the report does not completely claim that fintech entities and digital asset solution providers as purely tidy. The sectors are termed as the potential promulgator of crimes in the financial system, including money laundering operations and financing terrorist activities.
Authorities all over the world have for a long time doubted that crypto exchanges and other crypto entities could be inclined to use their platforms to promote financial crimes, either directly or indirectly. As a result, these authorities have been tightening their anti-money laundering laws.
The National Risk Assessment report did not single out financial risks posed by crypto assets, but this does not mean the sector is clean. Cryptocurrency entities in Mexico are tasked with reporting crypto transactions exceeding $2,500 to the financial watchdog, to keep AML requirements in check.