The Cartels Have Gone High Tech

RodMartin.org has published an article entitled "The Cartels Have Gone High-Tech. We’re Still Underestimating Them." Unfortunately, most of this article is behind a spam wall (you have to provide an email and register). But what is available to read is interesting:

    Many civilians hold preconceived notions about criminals and their activities. Some are surprised to learn that criminals are not all bumbling, uneducated brutes, and that their ranks include highly intelligent businesspeople, scientists, and engineers. Professionals carry this same burden. Preconceived notions abound.

    For years, many experts felt confident that fentanyl would not be abused, simply because it was so potent and dangerous. More than 500,000 Americans have died from fentanyl-driven synthetic opioid overdoses since 2005.

    Strange submarines were once dismissed as Bigfoot sightings, urban legend, and nothing more. Then, in 1996, the United States Coast Guard captured an intact semisubmersible narcosub 100 miles off the coast of Costa Rica. It had a carbon-fiber hull, diesel-electric power, thermal-blocking, water-cooled exhausts, and satellite navigation. A clandestine shipbuilding program was operating in the jungles of South America. The myth of the narcosub was shattered.

    El Chapo’s communications network told a similar story. What looked like disposable SIM cards and burner phones turned out, once an FBI-turned IT specialist gave up the details, to be a private VoIP network running on servers scattered across Canada and the Netherlands. The network was complete with automated wiretap software, spyware for real-time GPS tracking, and counter-surveillance tools aimed at cartel rivals and Mexican state officials.

    The Zetas were thought to rely on off-the-shelf walkie-talkies and pirate frequencies. They were actually running an air-gapped, military-grade multistate radio command network.

    Even the small stuff got underestimated. Los Viagras ran what looked like a low-grade Wi-Fi extortion racket in rural Michoacán, charging residents $25–$30 a month, a simple municipal shakedown worth $150,000 a month on paper. Then cyber-forensics specialists opened the seized routers and found firmware built for deep packet inspection, MAC address logging, and traffic redirection. In other words, a signals intelligence network for monitoring police radios and triggering an internet kill-switch during military operations.

The article then moves on to presumably discuss the recent discovery of an illegal cryptocurrency mining operation which was allegedly drawing power from infrastructure linked to a nearby hydroelectric system, in Tlaola, Puebla state, Mexico. The linked news article goes on to relate:

    Crypto mining — which uses powerful computers to generate virtual assets such as bitcoin — represents a new frontier in Mexico's fight against organised criminal groups, which have extended their reach beyond drug trafficking and extortion into the murkier realm of financial crime.

    In Puebla, authorities discovered 300 graphics processing units (GPUs), 80 medium-voltage terminals and eight satellite antennae — all geared to compete against millions of other machines to solve puzzles and create valuable new crypto coins.

    While a relatively modest operation by international commercial standards, it is the fourth such crypto farm uncovered in the area since early last year.

    "Drug cartels appear to have reached a new level of sophistication," said David Saucedo, a Mexico-based security analyst, adding that setting up such an operation would have required technical expertise and backing from a well-financed group, such as one of Mexico's most powerful cartels.

And:

    Electricity is the biggest cost for mining crypto, as energy prices have increased and the process of minting a single unit of virtual currency has become more resource-intensive.

    The University of Cambridge's Bitcoin Electricity Consumption Index estimates the cost of minting one bitcoin — the most widely used cryptocurrency — at nearly $45,000. This would still bring a substantial profit when sold at current prices of around $78,000.

    "If they were stealing the electricity, the main costs of the operation would be, well — nothing," said Samuel Leon, an expert in energy theft at Mexico's Iberoamericana University, referring to the Puebla operation.

    Mexican authorities said they are investigating whether the crypto farm was stealing electricity from a nearby hydroelectric dam. 

The news article also adds:

    Three other similar crypto farms were found last year in the vicinity of the nearby hydroelectric dam in northern Puebla. Local authorities said they are collaborating with nearby states to investigate the possibility of more hidden operations.

    Similar raids have taken place in Brazil, the US and Southeast Asia, including a major bitcoin mining operation in Thailand that spanned five provinces. 

 To quote from the movie Predator, "Pretty sophisticated for half-assed mountain boys."