Mexico Regulator Says 12 Crypto Exchanges Are Operating Illegally


Mexico’s Financial Intelligence Unit (UIF) has accused 12 crypto exchanges of failing to meet their reporting requirements.

According to Santiago Nieto Castillo, the agency’s head, the 12 exchanges whose names have not been disclosed are not registered with the agency and operate illegally, local newspaper El Economista reported on Wednesday.

“We generate cases so the attorney general can work,” said Nieto Castillo during a seminar on financial information and risk management.

UIF did not immediately respond to CoinDesk’s requests for the names of the crypto exchanges involved.

Nieto Castillo said fighting money laundering through cryptocurrencies is a priority for UIF.

“A fundamental topic will be to analyze cryptocurrencies and their relationship to criminal groups. I am impressed with the fact that many of the cryptocurrency platforms are installed in several communities in the state of Jalisco, ”said Nieto Castillo, referring to an area in Jalisco that is dominated by a drug cartel called Nueva Generación.

After the Fintech Act was passed in 2020, exchanges began reporting transactions for 645 units of account (UMAS, in Spanish), the equivalent of $ 57,804 M $ ($ 2,896).

To date, UIF has received nearly 3,400 notifications from 23 exchanges reporting information to the Mexican Tax Administration Service (SAT), Nieto Castillo said.

Upon receiving this information, the UIF identified at least three potential money laundering cases through the use of cryptocurrencies, the official added.

One of the cases involves Nigerian citizens in Mexico City who were involved in cyber fraud and sent cryptocurrencies back to their home country, Nieto Castillo said.

Mexico’s UIF operates under the supervision of the Financial Secretariat and is responsible for analyzing information related to illegal money transactions.

In June, Arturo Herrera, Mexico’s finance minister, said cryptocurrencies are not legal tender and are not treated as currencies under the country’s current regulatory framework.

These guidelines are not expected to be changed in the short term, Herrera said last month during a presentation to the Financial Action Task Force, a global anti-money laundering group.