Mexican drug cartels have adopted the same diversification strategies as successful business moguls like the investors of Shark Tank to safeguard their empires. They have ventured into 21st-century cybercrimes, including phishing, vishing, ransomware, and pig butchering scams. These Mexican cartels utilize both traditional fiat currencies and cryptocurrencies to conduct their illicit activities. The cartels have expanded; they have a military arm, a financial arm, a customer service arm, and, yes, an IT department. They have now turned those IT departments into cybercrime teams, leveraging technology for various illicit activities. This shift allows them to expand their revenue streams and exert influence beyond traditional drug trafficking. Here are some key points:
An example of this shift is the Jalisco New Generation Cartel (CJNG), and the Sinaloa Cartel has been operating a cybercrime campaign of timeshare sales and posing as a law firm helping the elderly get out of their timeshare. Both ruses to swindle unsuspecting targets out of thousands or, in one case, hundreds of thousands of U.S. dollars.
Dark Web, Cryptocurrency, and Money Laundering: The cartels utilize the dark web to distribute drugs and launder money. They also use cryptocurrencies like Bitcoin to facilitate these transactions. The United States may choose to increase its use of special agents and forensic accountants to track traditional and cryptocurrencies. Money laundering is a standard practice for illegal operations, and the cartels are no different. Another way they move their money is through cryptocurrencies. Using these cryptocurrencies to wash their money by moving funds across borders quickly and anonymously. They often hire professional cryptocurrency money launderers who move the money through various transactions to obscure its origin. This new form of money allows the cartels to avoid traditional banking systems that are subject to strict regulations and monitoring. This allows them to move large sums of money without raising suspicion. Cryptocurrencies enable cartels to move money fast, like the click of a button on a smartphone. Traditional methods of moving money, such as bulk cash smuggling, are slower and more easily detected. Cryptocurrencies, on the other hand, can be transferred instantly across borders.
Blockchain Technology: Provides a ledger for every transaction; it does not list the names of those involved. This makes it challenging for the authorities to track the individuals behind the transactions.
In international operations, the cartels use cryptocurrencies to finance their global operations. For example, they might purchase cryptocurrencies in one country at below-market rates and sell them in another country, making a profit while laundering money.
These cyber-cartels pose unique threats to U.S. national security. Narcotics can impact the people who work in the national security sector. However, this new venture can be just as harmful or even worse, as it can target critical infrastructure with open vulnerabilities and private companies interrupting supply systems.
U. S. RESPONSE
The U.S. Senate panel has proposed authorizing military cyber operations to combat these cartels. This includes detection, monitoring, and other operations in cyberspace.
Designation of Cartels as Foreign Terrorist Organizations and the Impact on Cartel Cyber Operations
“By the authority vested in me as President by the Constitution and the laws of the United States of America, including the Immigration and Nationality Act (INA), 8 U.S.C. 1101 et seq., the International Emergency Economic Powers Act (IEEPA),50 U.S.C. 1701 et seq. it is hereby ordered:
Section 1. Purpose. This order creates a process by which certain international cartels (the Cartels) and other organizations will be designated as Foreign Terrorist Organizations, consistent with section 219 of the INA (8 U.S.C. 1189), or Specially Designated Global Terrorists, consistent with IEEPA (50 U.S.C. 1702) and Executive Order 13224 of September 23, 2001 (Blocking Property and Prohibiting Transactions With Persons Who Commit, Threaten to Commit, or Support Terrorism), as amended.”
Executive Order signed by President Donald J. Trump, January 20th, 2025
The designation allows for enhanced surveillance and intelligence-gathering capabilities, enabling authorities to monitor and disrupt cyber activities more effectively.
Resource Allocation: By treating the cartels as terrorist organizations, law enforcement agencies can leverage a broader range of tools and legal frameworks to prosecute cartel targets and freeze their assets. A comprehensive strategy that aims to weaken the cartels’ operational capabilities and reduce their influence both within Mexico and internationally.
Drones: This designation will open law enforcement agencies to coordinate with military operations centers to monitor information gathered by intelligence, surveillance, and reconnaissance (ISR) drones. The U.S. Army has begun testing the Multi-Function Electronic Warfare – Air Large (MFEW-AL) payload designed to be integrated into unmanned aerial vehicles. This system features cutting-edge components to provide improved electronic attack and EW support capability to warfighters. It is designed to allow the U.S. Army to establish EW spectrum dominance in modern battle spaces. The U.S.-Mexico border could be a proving ground for this UAS system and an operational training ground. The U.S. military could also deploy a range of counter-drone technology to the border.
NSA Increased Operations: The Office of Tailored Access Operations (TAO) is responsible for cyber-warfare and intelligence-gathering. This unit comprises over 1,000 military and civilian computer hackers, intelligence analysts, targeting specialists, computer hardware and software designers, and electrical engineers. TAO could open its services to local, state and federal law enforcement to target the cartel members operating inside and outside of the United States.
International Cooperation: This designation can facilitate greater international cooperation in combating cybercrime, as countries may be more willing to share intelligence and collaborate on joint operations.
Impact on the Fight Against Cartels
Legal and Financial Tools: The designation of Foreign Terrorist Organizations (FTOs) provides additional legal and financial tools to contend with the cartels. Law enforcement can now freeze assets and impose sanctions more, pursuing the cartels financial infrastructure. This includes the ability to prosecute individuals and entities that provide material support to the cartels, cutting off their financial lifelines. These tools also extend to international cooperation, where foreign governments can assist in tracking and seizing assets located abroad, further tightening the noose around the cartels’ global financial networks.
Military and Law Enforcement Actions: The designation justifies the use of military and law enforcement actions against the cartels, potentially leading to more aggressive and coordinated efforts to dismantle their operations. Many of the cartels have established significant positions in border towns on both sides of the U.S.-Mexico border. The Department of Homeland Security (DHS) and the Federal Bureau of Investigation (FBI) may be tasked with standing up a specialized task force for increased special operations, utilizing military intelligence-gathering assets and personnel.
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