Chinese Fentanyl Chemical Vendors Accept Bitcoin and Tether
• Blockchain analytics startup Elliptic revealed that Chinese companies selling fentanyl precursors accept large sums of cryptocurrency payments, primarily in bitcoin (BTC) and tether (USDT).
• Over 90% of the Chinese enterprises surveyed by Elliptic take cryptocurrencies as payment for fentanyl precursors.
• Transactions involving these businesses totaled over $27 million in cryptocurrency.
Background on Fentanyl Precursor Use
Fentanyl is a synthetic opioid used to treat severe pain, but it has become increasingly popular among drug dealers because of its high potency and affordability. The ingredients needed to make fentanyl tablets can be purchased through Chinese chemical suppliers, with an estimated street value of $54 billion.
Cryptocurrency Payments for Fentanyl Ingredients
According to Elliptic, 66% of all payments for fentanyl ingredients are made using bitcoin, 21% via tether transfers on the Tron network, 13% with tether transfers on the Ethereum network, and 1% through any other cryptocurrency. These transactions have increased significantly since 2019 when only 0.3% were made using cryptocurrencies.
Law Enforcement Challenges
The use of cryptocurrency in illegal transactions makes it difficult for law enforcement to prevent or monitor them. In China especially, where the majority of fentanyl precursors are purchased using bitcoin, preventing these activities becomes even harder due to the country’s restrictive policies around digital currencies.
Elliptic’s Role
In order to increase transparency and safeguard the bitcoin market from money laundering activities associated with these illegal transactions, Elliptic has been informing crypto exchanges about specific wallets connected to these chemical suppliers.