A recent report from Elliptic found that over 90 Chinese companies were supplying precursors of fentanyl to the U.S. Over 90% of these companies accepted crypto payments.
Blockchain analytics and crypto compliance solutions firm Elliptic has published a report on the use of crypto to fuel the fentanyl epidemic in the United States. The firm found that Chinese businesses were also receiving tens of millions of dollars in crypto payments to supply the synthetic drug to the U.S.
Crypto Payments to Fentanyl Manufacturers Explode
Elliptic explained that “most fentanyl trafficked into the United States is manufactured using precursors imported from Chinese suppliers.” Researchers from the firm received offers from over 90 Chinese companies to supply the precursors, and 90% of these accepted crypto as payment. These companies have also shipped the precursors to Mexico.
After analyzing the crypto wallets used by the companies, Elliptic learned that they had received payments totaling over $27 million. The number of transactions has also increased by 450% year-over-year. Of course, the $27 million pales in comparison to the billions in cash that the Chinese fentanyl export market is reportedly worth.
China was the main source of fentanyl for many years but banned the drug in 2019 following diplomatic negotiations with the U.S. The U.S. government has been working overtime to prevent the expansion of the fentanyl market and has taken a number of steps to that end.
U.S. Treasury Sanctioned Fentanyl Suppliers
The United States Treasury has also sanctioned those associated with this fentanyl network. The sanctions were imposed on two Dutch nationals and a Briton. These individuals allegedly supplied fentanyl and other drugs to buyers over the Internet.
The Treasury has been particularly forward with sanctioning those using crypto to commit crimes. Crypto mixers are another major point as they can allow bad actors to obfuscate their identity. Because of this, the U.S. government has already taken several steps to ensure that they are not used.
Nearly 300 Arrested in ‘Dark Web’ Crackdown, Crypto Seized
The U.S. government has been working hard to contain the fentanyl crisis, with international authorities working on cooperation. In early May, authorities arrested nearly 300 individuals for their involvement in a dark web fentanyl market. The authorities seized $53 million in cash and crypto.
The dark web has often been associated with cryptocurrencies, and this isn’t the first time authorities have made such arrests. Governments worldwide are attempting to prevent illicit transactions using crypto, and the dark web is high on their priority list.
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