Colombian crypto broker gets 13 years in prison for laundering $14.5 million in cocaine money through Tether

A Colombian crypto broker has been sentenced to 160 months in US prison for helping launder $14.5 million in cocaine proceeds through Tether (USDT) and a web of shell companies, the Department of Justice announced on October 21.

How the stablecoin laundering network moved funds across borders

According to US prosecutors, the operation moved money between Colombia and the United States between May and November 2023. Criminal proceeds were converted into Tether, transferred to an American intermediary and exchanged for US dollars before being routed through US-based shell companies.

The funds subsequently returned to Colombian businesses, where they were converted into Colombian pesos and distributed to members of the network.

This arrangement connected cryptocurrency transactions with traditional banking services, allowing the operation to move value across borders through several financial channels.

At the centre of the American operation was Maximilien de Hoop Cartier, an Argentine national who operated an unlicensed cryptocurrency money-transmitting business. Prosecutors said the business used companies presented to banks as legitimate technology enterprises.

The wider Stablecoin laundering network therefore relied on more than digital assets alone. Stablecoins facilitated the movement of value, while intermediaries, corporate structures and bank transfers helped convert the funds into conventional currency.

The US Department of Justice said Cartier had previously pleaded guilty and received an eight-year prison sentence for his role in transmitting more than $470 million in illicit proceeds through the United States.

Cocaine conspiracy expands the investigation

The investigation extended beyond financial transactions. US authorities also linked Zuluaga Duque and other defendants to a conspiracy involving the planned importation of cocaine from Colombia into the United States.

In November 2023, law enforcement sources helped arrange a transaction involving approximately nine kilograms of cocaine paste intended for processing into cocaine before delivery to New York.

Prosecutors said Adrian Fernando Areiza Ceballos delivered the substance to an undercover officer, while Zuluaga Duque received a commission for helping arrange the transaction.

A second proposed transaction followed in February 2024 and involved approximately 100 kilograms of cocaine paste. Colombian police later executed search warrants and recovered around 111 kilograms of the substance, according to the Justice Department.

Zuluaga Duque and other defendants were arrested in Medellín, Colombia, on April 30, 2024, with assistance from Interpol. The investigation ultimately brought together evidence concerning cryptocurrency transfers, financial intermediaries and suspected narcotics trafficking.

The Stablecoin laundering network case consequently illustrates how cryptocurrency investigations can overlap with broader criminal inquiries.

Authorities were not simply examining suspicious blockchain transfers; they were also tracing the people, companies and underlying activities associated with the funds.

US prosecutors warn about cryptocurrency-related financial crime

US Attorney Jamie McDonald said the defendants used a combination of digital assets and conventional financial structures to move criminal proceeds across international borders.

McDonald said that the defendant and his conspirators operated a sophisticated international scheme to utilize cryptocurrency, a network of shell companies in the U.S. and Colombia, and numerous crypto accounts.

McDonald also warned that the conduct had consequences beyond the individuals involved, stating: “Such conduct reduces trust in the financial system and endangers lives.”

The court ordered Zuluaga Duque to forfeit $14,751,846 and surrender cryptocurrency associated with four wallet addresses under his control. He was also sentenced to five years of supervised release following his prison term.

The remaining five defendants had already been sentenced. Their prison terms ranged from three to eight years, according to the Justice Department.

The Stablecoin laundering network case highlights the importance of distinguishing between the legitimate use of stablecoins and the conduct of entities that misuse them.

Stablecoins such as USDT can support trading, international payments and liquidity management, but transactions involving unlicensed intermediaries may introduce legal, compliance and counterparty risks.

As regulators continue scrutinising digital asset businesses, the Stablecoin laundering network case may reinforce the importance of effective compliance systems, transparent operations and responsible participation in cryptocurrency markets.