Feds Go After Crypto Wallets Used in Fentanyl Trade

<p>In the ongoing dance between the feds and those dabbling in the dark
art of fentanyl trafficking, the United States Treasury's Office of Foreign
Assets Control (OFAC) is certainly stepping on some toes. The feds’ size 12s
have landed on a collection of cryptocurrency wallets that they claim have ties
to the illegal fentanyl trade—primarily orchestrated out of China. </p><p>Crypto's Dark Connection: Tainted by Fentanyl</p><p>Drug traffickers, many of whom are based in China, have been utilizing
various <a href="https://www.financemagnates.com/terms/c/cryptocurrencies/">cryptocurrencies</a> to grease the wheels of their less-than-savory
operations. The feds, with their eagle eyes, <a href="https://home.treasury.gov/news/press-releases/jy1779#:~:text=WASHINGTON%20—%20Today%2C%20the%20U.S.%20Department,of%20ton%20quantities%20of%20fentanyl%2C">have
honed in on six entities and their associated digital wallet addresses</a>,
bestowing upon them the dubious distinction of being on the specially
designated nationals (<a href="https://ofac.treasury.gov/specially-designated-nationals-and-blocked-persons-list-sdn-human-readable-lists" target="_blank" rel="nofollow">SDN</a>) list. That's not a list you want to be on, by the
way. Among those entities, one bears a name: Valerian Labs.</p><p>It's like a plot right out of a crime novel. These digital addresses,
now ensnared in the web of federal attention, have collectively soaked up
nearly <a href="https://www.chainalysis.com/blog/ofac-sanctions-china-fentanyl-october-2023/">$3.8
million worth of cryptocurrency</a>. Sounds like a pretty penny, right? But,
say the feds, this mountain of digital cash likely represents the means to
enable the potential trafficking of copious amounts of drugs—fentanyl, in
particular. And we're talking about a scale that extends far beyond the borders
of the United States, much to the chagrin of US law enforcement.</p><p>The Crypto Trail: Finding the Guilty Parties</p><p>The feds’ watchdogs are nothing if not thorough. Seventeen wallet
addresses were unearthed in the OFAC's latest sweep. And the digital currencies
involved weren't just any run-of-the-mill coins; we're talking about big
players like <a href="https://www.financemagnates.com/terms/b/bitcoin/">Bitcoin</a> and Ethereum. Even Tron managed to sneak its way into the
mix. Not to mention, most of the shadier transactions in Ethereum and Tron were
carried out with the help of stablecoins—cryptocurrencies with values tethered
to good old-fashioned fiat currencies. So, every time you're trading with
stablecoins, just remember to, figuratively, wash your hands.</p><blockquote><p lang="en" dir="ltr">How do Chinese companies sell fentanyl ingredients? By using "cryptocurrency transactions to conceal their identities &amp; the location &amp; movement of their funds", per <a href="https://twitter.com/TheJusticeDept?ref_src=twsrc%5Etfw">@TheJusticeDept</a>. I have a bipartisan bill to crack down on crypto funding crimes.<a href="https://t.co/VcpPLWZfmm">https://t.co/VcpPLWZfmm</a></p>— Elizabeth Warren (@SenWarren) <a href="https://twitter.com/SenWarren/status/1709951213494514062?ref_src=twsrc%5Etfw">October 5, 2023</a></blockquote><p>The world of crypto fentanyl trafficking is, thank the stars, seemingly
small. The wallets of these five shady individuals all share a cozy little home
on a centralized crypto exchange. They each received hundreds of thousands of
dollars in cryptocurrency. While the name of the exchange is conveniently
omitted, it's clear that it played host to some dubious dealings. After all,
it's not every day you witness a slew of consistent payments flowing from
personal wallets and other big-name exchanges. And such consistency can only
mean one thing: the sale of very specific goods. In this case, the culprit is
none other than the dreaded fentanyl and its precursor chemicals. Can you tell
we’re fans of true crime drama here at <a href="https://www.financemagnates.com/">Finance Magnates</a>?</p><p>The Rising Tide of Crypto-based Fentanyl Sales</p><p>The global stage has witnessed a surge in crypto-fueled fentanyl
transactions. Reports indicate that since 2018, China-based fentanyl vendors
have raked in an impressive <a href="https://www.context.news/digital-rights/how-crypto-helps-latin-americas-drug-cartels-do-business">$37.8
million in cryptocurrency</a>—a staggering sum by any measure.</p><p>The OFAC has been on the prowl, sniffing out Bitcoin addresses linked
to such notorious suppliers. But this time around, they've expanded their net,
adding Tron to the mix. In a separate incident, the OFAC even cracked down on
an Ethereum address associated with a member of a <a href="https://www.chainalysis.com/blog/ofac-fentanyl-sanctions-mexico-september-2023/">Mexican
money laundering network</a>. They're making it clear: nobody's beyond their
reach.</p><p>So, remember, the feds are still watching, and the crypto underworld
continues to do shady things. The murky relationship between cryptocurrency and
organized crime persists. It's a reminder that, while in the past, authorities
have been confident <a href="https://www.financemagnates.com/cryptocurrency/news/cryptocurrency-crimes-are-falling-sharply/">crypto
crime is on the decline</a>, the problem runs deeper than we may care to admit
and, clearly, <a href="https://www.financemagnates.com/cryptocurrency/news/cryptocurrency-money-laundering-climbs-30-in-2021/">using
crypto for money laundering is still a thing</a>.</p>

This article was written by Louis Parks at www.financemagnates.com.