Wednesday, July 17, 2024

Chinese Labs Are Selling Fentanyl Ingredients for Millions in Crypto


Despite that trend from dark web fentanyl sales, this week four members of the US Congress reintroduced a bill called dark web interdiction act To increase sentences for dark web drug dealers, focusing specifically on fentanyl. The bill would also strengthen and make permanent the Joint Criminal Opioid and Darknet Enforcement Task Force that has helped coordinate law enforcement takedowns of hundreds of alleged dark web drug sellers and administrators in recent years.

But even though dark web retail cryptocurrency trading in fentanyl has been banned, and as law enforcement cracks down on what remains, Elliptic’s research shows that the cryptocurrency of fentanyl ingredients is important for drug cartels. -based bulking – which then manufactures synthetic opioids and smuggles them. It continues to be sold in the physical world in the US and other countries. In its study of pre-selling chemical labs, Elliptic noted that many of the websites it surveyed specifically mentioned they shipped to customers in Mexico, and 17 labs also sold prepared fentanyl and other more potent opioids.

Those Chinese chemical firms have in some cases sold products other than fentanyl precursors, Elliptic’s Robinson notes, and he admits that blockchain analysis can’t tell the difference between those sales and sales of fentanyl ingredients. Some also sold precursors to amphetamine, methamphetamine, and other opioids. But researchers at Elliptic noticed in some cases that companies are advertising that the fentanyl precursor is their best-selling product. Robinson also notes that Elliptic does not claim to have measured the entire crypto-based fentanyl supply chain, but only a “snapshot” of transactions it can identify, suggesting that the $27 million estimate is in fact 10,000. is likely to contain less than the total amount of fentanyl. Preceding sales over the past half decade.

The US government may be increasingly aware of the role and cryptocurrency fentanyl precursor vendors in China play, but has so far acted against the industry on a much smaller scale than the one exposed by Elliptic. US Treasury Department last month sanctions imposed Against four Chinese men and two chemical laboratories, Wuhan Shuokang Biological Technology and Suzhou Xiaoli Pharmatech, for selling fentanyl precursors to drug cartels in Mexico. The three men were also convicted in absentia. The fourth, according to the Treasury announcement, was an associate who accepted cryptocurrency payments on behalf of one of the two companies.

Why Chinese chemical companies accept cryptocurrency for the sale of their fentanyl ingredient is counterintuitive, given the ability of companies like Elliptic and other cryptocurrency tracing firms to track their sales of dangerous and potentially illegal products in the blockchain. It may seem But Robinson says Chinese companies may use the cryptocurrency because it is difficult to seize or block – and they may not particularly care that the money can be traced by Western companies and law enforcement. Is, as long as they are still willing to cash a cryptocurrency exchange. Outside. “If a company in China wants to accept crypto payments, no one can stop it from happening,” says Robinson.

But that traceability also means there is an opportunity to pressure cryptocurrency exchanges to disconnect the accounts of fentanyl precursor sellers identified by Elliptic. Elliptic, in fact, informs the exchange of hundreds of addresses linked to Chinese chemical companies. “There’s definitely a role for those services to put a stop to it,” Robinson says. And exploiting that crypto chokepoint could probably cut off at least a fraction of the deadly flow of fentanyl around the world — not at its destination, but at its source.