Fentanyl Ingredients Sold For Crypto By Chinese Labs

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Image source: Pixabay

Chinese chemical producers accept cryptocurrency as payment for fentanyl ingredients that they sell to pharmaceutical organizations around the world.

Researchers from crypto-analytics platform Elliptic found more than 90 Chinese chemical companies selling fentanyl precursor chemicals and advertising their products on the open web, 90% of which offered to accept payment in crypto -currencies like Bitcoin (BTC) and Tether (USDT).

“Many of these companies were also willing to supply fentanyl itself, although this has been banned in China since 2019,” the company said in a recent report.

The report found that most Chinese labs supplying fentanyl ingredients used accounts at “three specific exchanges” based outside of China, which were not named in the report.

After analyzing the cryptocurrency wallets used by these companies, Elliptic revealed that they had received thousands of payments totaling just over $27 million and that the number of “transactions increased by 450% from a year to year”.

Elliptic said several suppliers admitted to shipping fentanyl precursors and the drug itself to Mexico, where most of the fentanyl entering the United States originates.

“Most of the fentanyl trafficked into the United States is made from precursors imported from Chinese suppliers,” the blockchain analytics firm added.

Similarly, a separate report by blockchain analytics firm Chainalaysis found that cryptocurrency addresses associated with alleged vendors of China-based fentanyl precursors received over $37.8 million worth of cryptocurrency. since 2018.

The report detailed that Latin American-based crypto users were the most involved in Fentanyl transactions, estimating that they sent nearly $3.6 million worth of cryptocurrency to China-based chemical stores.

US Regulators Slam Crypto’s Role in Fentanyl Exchanges

Last month, U.S. Senator Elizabeth Warren exposed the role of cryptocurrency in fentanyl drug deals and demanded her anti-money laundering bill during a congressional hearing.

The Massachusetts Democrat and longtime crypto critic said her bill, the Digital Assets Anti-Money Laundering Act, will close the gaps “in our anti-money laundering rules and will prevent drug dealers and cartels from using cryptography to fuel their illegal activities.”

“Crypto helps fund the fentanyl trade. And we have the power to shut that down. It’s time,” Warren added during a Senate Banking Committee hearing.

Fentanyl is a synthetic opioid painkiller that looks like morphine but is up to 100 times more potent. It is prescribed by doctors to treat severe pain such as that experienced by cancer patients.

However, fentanyl is also illegally manufactured and used as a recreational drug due to its powerful effects on the body.

It has long been one of the most dangerous commodities in the underground cryptocurrency economy.

In 2021, the United States recorded more than 106,000 drug overdose deaths, of which synthetic opioids were implicated in about 70,600, according to a National Institutes of Health study.

In recent years, most dark web markets have begun banning the drug due to both the harm the substance causes to customers and the law enforcement attention that comes with it.

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