May 24, 2023

Over 90 China-based Groups Sell Fentanyl by BTC, USDT – Study

Fentanyl

Fentanyl

A recent study found that Chinese drug dealers are increasingly depending on cryptocurrencies to fund their operations, according to MarketWatch.

The study, which was conducted by blockchain analytics firm Elliptic, showed that more than 90 Chinese drug groups offer to sell fentanyl for cryptocurrencies as a payment method, including Bitcoin and Tether.

Elliptic reported a 450% increase in the number of payments, which the wallets of these groups received in the 12 months by April 30, noting that the crypto payments reached $27 million, which is equivalent to the amount of chemicals to produce fentanyl pills with a street value of approximately $54 billion, an amount enough to cause 8.6 billion people to suffer a fatal overdose from the drug.

Fentanyl overdoses became the main cause of death for those aged 18-45 in the United States. It is cheaper to produce than heroin and 50 times more potent, therefore it became a massive source of profits for international drug cartels.

For many years, China was the main source of illicit fentanyl. But in 2019, following intense diplomatic pressure from the US, the Chinese government regulated the drug by effectively banning its export.

Elliptic researchers found that 17 China-based groups are offering to provide fentanyl itself, despite the Chinese government ban. Others offered to supply other synthetic opioids even more potent than fentanyl and they are currently legal to produce and sell in China.

The groups give cryptocurrency wallet addresses for payment. Bitcoin was the most used cryptocurrency for payment, followed by Tether.

The study mentioned one of the top suppliers, who managed to earn millions of dollars in this way, is Alex Peijnenburg. The US authorities sanctioned him in November 2022, for selling fentanyl and other drugs to US consumers through online stores.

It is worth mentioning that most crypto exchanges comply with anti-money laundering (AML) regulations and sanctions and use blockchain monitoring systems.

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