Old Schemes Using New Technologies

While doing research for an upcoming article on the convergence of crime and terrorism, I came across this paper on money laundering and bulk cash smuggling techniques written by Douglas Farah that reinvigorated my interest in digital currency.  In his article, Farah describes three new factors in the drug money laundering process in Mexico: use of the Chinese trade model, established Russian laundering structures and new technologies.  Open system prepaid cards, digital currencies, mobile payments, online payment providers and massive multiplayer online role-playing games (MMORPG) provide methods of laundering funds that, according to Farah, fall largely outside the scope of traditional AML regulatory structures.

It’s interesting to think about drug traffickers in Mexico using a P2P system such as Bitcoin to make payments or how the incorporation of mobile payments might change the money remittance landscape.  Mobile money transfer is big business, especially in places like Kenya and Mexico where households depend on remittances as a source of income.   According to this IMF report, published in October 2011, M-PESA now processes more transactions domestically within Kenya than Western Union does globally and provides mobile banking facilities to more than 70 percent of the country’s adult population. Using M-PESA as the standard, telecommunication companies and the financial services industry set their sights on Mexico as another prospective breeding ground for mobile money users.

Bitcoin and mobile money transfer are just two more ways in which globalization can simultaneously benefit and threaten the safety and security of a population.   See this article by Peter Andreas for more about the way in which the same global transformations in communication, transportation, and finance that aid licit business also aid illicit business.  That said, perhaps those of us interested in red teaming and adversary scenario design could try to tackle this topic and outpace the traffickers.


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