Ayoo what's going on viewers of the tube my name is Dima and welcome to the channel that brings you that samurai crypto mumbo jumbo with Swift
and speed but at the end of our content you get the full picture kind of like Tara wheeler in front of Congress other day I'm a cybersecurity policy fellow with New America I started in computers by building pentium machines after school from my stepdads computer repair company I have been a Linux systems administrator and architect for secure systems a senior
cybersecurity executive at two large publicly traded security corporations and I am an offensive information security researcher that's how you pronounce hacker when you're testifying in front of a legislative committee you know our hack jobs it's time for Chico crypto well I said I was going to do it last week and one of my worst performing videos over the past month yet is the most important YouTube loves to censor the good stuff but that video was showing how to major exchanges Chinese founded Lobby and Finance are two of the largest recipients of alissa and illegal funds and the research it wasn't, even put out from me it was put together by a professional blockchain data analysis firm chain alice's called money laundering and cryptocurrency how criminals moved billions in 2019 and the data it directly zeroed in on finance and hua be receiving a large majority of the illegal funds out of the tracked funds by naps received over twenty seven percent wahby nearly twenty five percent and as a primer for the information I'm about to drop I highly recommend you watch that video breakdown of the chain Alice's report that video
is in the description but if you don't want to watch in that video I highlighted how chain alysus works with the US government and have a feeling this report was basically a warning to finance and Hobby clean up your act or you're gonna get repercussions from governments across the globe well old cz by Nance cried to chained Alice's after their report came out and right after I dropped my video chain Alice's tweeted this the purpose of our crypto crime research is to shine a light on illicit activity and promote the good work of law enforcement and exchanges like finance to make our crypto safer for everyone our report on money laundering revealed a network of corrupt OTC brokers and was not aimed at finance our long-standing partner we strongly support market leaders like finance who use our data to improve the quality of this space for everyone really chain alysus come on I showed in that video how C Z and Finance adopted your compliance tool all the way back in October of 2018 this article explains it very well chain Alice's partners with finance to tackle global cryptocurrency money-laundering well what has happened in over a year-and-a-half finance is continuing to allow illicit funds to move through its exchange and they will never stop and now let us take a deep dive right into why finance wavi and other crypto exchanges across the globe are indirectly or directly involved with a massive money laundering operation which involves a Chinese mafia Mexican cartels Chinese underground banking systems in Chinese OTC crypto brokers so let's begin with the OTC brokers as they were named in the chain Alice's report they called these brokers who specialized in moving illegal funds the rogue 100 and the rogue hundred is moving hundreds of millions of dollars with total volumes increasing month by month since 2017 the chain alysus report describes what the rug 100 does very well the problem however is that while most OTC brokers run a legitimate business some of them specialize in providing money laundering services to criminals OTC brokers typically have a lower kyc requirement than the exchanges they operate on many of them take advantage of this laxity and help criminals launder and cash out funds usually first by exchanging Bitcoin and other cryptocurrencies into Heather as a stable intermediary currency before they presumably cash out into fiat which happens in a complex web always involving more than one OTC broker by analyzing their transactions in the chain Alice's actor they visualize how to corrupt OTC brokers takin funds from criminal sources on the far left we see funds start at a criminal entity move through an intermediary wallet and then move onto to OTC brokers both of whom are on the road hundred lists the OTC brokers then move the funds to Wobby most likely to be converted to USD T they also visualize an example of how corrupt OTC brokers frequently transact with one another moving millions upon millions worth of BTC back and forth through each others to try and trick analysis software and hide the trail but tether USD T is highly important to those OTC deaths as it keeps the criminal clients value stable until they are ready to cash out into fiat well I wonder which exchanges have the most tether according to the tether rich list number one finance number to bind hands number three Wahby number four Wahby how about we just look at the volume by currency breakdown for finance and hua be 80% USD T or over for each of the exchanges finance being slightly worse than hua B which makes sense because according to chain alysus they were receiving slightly more illicit funds so the reason for these high tether amounts on these exchanges is because these OTC desks need to keep criminal funds stable before cashing out on the Fiat exchanges another OTC desk which provides fiat services and more but the criminals who are they well like I mentioned it's a cooperation between the Mexican cartels the Chinese mafia with 
a little bit of Russian mafia sprinkled in to liven things up so how do I begin with this well let's begin with the war on drugs here in America after those wild 60s which love drugs in Vietnam made up the decade Richard Nixon decided to nip it in the bud made an announcement to the American public in 1971 let's listen in I began the meeting by making this statement which I think needs to be made to the nation America's public enemy number one in the United States is drug abuse in order to fight and defeat this enemy it is necessary to wage a new all-out offensive I've asked the Congress to provide the legislative authority and the funds to fuel this kind of an offensive this will be a worldwide offensive dealing with the problems of sources of supply as well as Americans who may be stationed abroad wherever they are in the world it will be government-wide pulling together the nine different fragmented areas where within the government in which this problem is now being handled and it will be nationwide in terms of a new educational program that we trust will result as from the discussions that we have had yes the war on drugs it was launched and I'm sure if you've watched narcos on Netflix you're up today on how the Colombian cartels including Escobar and the Met en supplied the US and their narcotics cravings then when they were stomped out wink wink the Mexican cartels took over in the 80s and 90s and became the main suppliers for the u.s. do you know how the rap sure how do you read don't be lame you can't can you do cocaine and those Mexican cartels are still the same suppliers to this day sure the ranks change leadership and marijuana isn't one of their larger exports due to legalization in the states but those cartels are still getting large amounts of harder narcotics across the border including prescriptions heroin fentanyl cocaine methamphetamine and it's analogs now the cartels super labs where these hard narcotics are cooked and made they need to be supplied with the base chemicals I'm sure you remember another recent pop culture icon besides in our coasts and if our reduction is not stereospecific then how can our product enantiomeric ly pure I mean is one phenol one hydroxy to methyl you know propane containing of course chiral centers at carbons number one and two on the propane chain reduction to methamphetamine eliminates which chiral centers Walter White breaking bad yeah it's a TV show but it's not that far from reality chemicals like pseudoephedrine and ephedrine are used for making mexican eyes yes home labs in the US have been replaced by large mexican super labs who have perfected their recipes and have access to large bulk shipments of the chemicals needed instead of having to separate it out of cold pills like sudafed but who is supplying the cartels with the base chemicals china is of course all it takes is a simple google search type in sudo fedra hydrochloride china scroll down and there is a reddit post does anyone know if you can get pseudoephedrine HCL in china and in the comments super easy with even supplier shipping to the US then the US economic 
security review commission put out this report in 2016 meth precursor chemicals from china implications for the united states this piece of the executive summary paints a perfect picture of what is going on while mexican cartels produce the majority around 90 percent of the meth used in the united states around 80 percent of precursor chemicals used in Mexican meth comes from China precursor chemicals are increasingly being shipped from China to Mexico where they are manufactured into meth transported across the southern border of the United States and brought into southwestern states Texas Arizona and California before being shipped across the country a period of increased cooperation between the US and Mexican governments in the late 2000s and early 2010's has done little to reduce a precursor flows with Chinese drug traffickers circumventing counter nakata cthe ortiz by shipping chemicals to portly regulated Central American ports before transporting them to Mexico so the cartels they're being supplied by the Chinese how is this happening well China is home to the world's second largest pharmaceutical industry by revenue producing and exporting vast quantities of generic drugs and active pharmaceutical ingredients and the country's vast chemical and pharmaceutical industries are weakly regulated and poorly monitored like everything in China as long as it gives their citizens wealth and hurts Americans they allow it well the Chinese mafia has taken full advantage of the weak regulations they partner with the cartels in the West so let's pull out a map and see how this works narcotic precursors are shipped from China and land in ports in Mexico and Central America hard narcotics are processed in the super labs in isolated jungles the narcotics then make their ways to the border and are imported into the US using air land and sea once they hit the states they are sold for cash money on the streets through a distribution web with the bulk of that cash ending up back in the hands of the cartels but this cash is stuck in the United States before Bitcoin and crypto they had to get this cash back across the border which resulted in large amounts of border seizures but recently this number has been plummeting according to this article Arizona ports saw similar rise and fall with seizures ranging from 500,000 to 1 point 8 2 million between 2005 and 2008 the next year seizures rose to nearly 5 million and then peaked at 12.1 million in 2011
in 2016 custom officers at arizona ports seized 960,000 a 92 percent drop from the peak in 2011 and just below in the article but experts say money is still getting across the border in immense amounts yes it is and it's through cryptocurrency much easier to move large amounts of value over a border through a computer than with physical cash wouldn't you say in October of 2017 even before the mass growth of the rogue OTC crypto desk the DEA was on to the scheme they released a report that Bitcoin and crypto was used for trade based money laundering schemes in the report they said mini china-based Ferns manufacturing goods used in trade based money laundering schemes now prefer to accept Bitcoin Bitcoin is wildly popular in China because it can be used to anonymously transfer value overseas circumventing China's capital controls the increasing use of OTC Bitcoin brokers who are capable of transferring millions of dollars in Bitcoin across international borders as part of a capital flight scheme is expected to continue to intertwine criminal money-laundering networks with capital flight in December of 2018 they put out a new report which zeroed in on the OTC brokers how Mexican cartels use Chinese crypto brokers to launder drug money from the article specifically DEA cited the Chinese underground banking 
systems cubs as a key laundering channel the Cubs money brokers the DEA noted was turning to Bitcoin both to launder money for drug traffickers and to assist Chinese nationals interested in moving amounts exceeding allowed annual limit of us $50,000 outside the country then just a few months ago a massive fentanyl supply ring which involved many Chinese nationals was busted apart shining a light into how the drugs were making it into the u.s. how Bitcoin was used in the process then lookee here in August of 2019 we have some kingpin act designations where three Chinese nationals and two Chinese companies were sanctioned and blacklisted including their Bitcoin addresses so the Chinese in their mafia they need to fuel their Empires through narcotic precursors they have a need that the cartels fill they buy it the cartels with the mass amounts of cash they receive they have a need they need it washed and cleaned here's where the Chinese Cubs come into play and their crypto OTC brokers a.k the rug 100 and the rug 100 love using finance and hobby so the doors are closing in on this game and this is just a Chico crypto high-level view of things so much more is involved why do you think millions is crossing the Russia China border daily and with these OTC brokers Heather is king from the article business is brisk thanks to a constant flow of Chinese merchants who come in daily with heavy bags of cash Oleg said his OTC desk sells about 3 million worth of crypto every day don't shoot the messenger I'm just here to show you how the crypto world works from the inside out Cheers I'll see you next time
