- The United States Treasury has sanctioned crypto wallets belonging to Chinese companies and entities linked to illicit fentanyl production
- The wallets are considered to facilitate the movement of funds between the manufacturers and suppliers of raw materials
- The U.S. Treasury had earlier sanctioned an Ethereum address linked to persons involved in the drug’s distribution
The United States Treasury Department’s Office of Foreign Assets Control (OFAC) has spread its net deeper into illegal fentanyl drug production to include crypto wallets tied to Chinese companies and their employees. In a statement by the U.S. Department of Justice (DOJ), the Chinese companies used cryptocurrencies to move funds to facilitate the manufacturing of the drug and to pay for raw materials used in its production. The sanctions are the second in about a week since OFAC sanctioned an Ethereum address linked to cartels involved in the drug’s distribution.
Hiding Identity and Location Through Crypto
According to the DOJ, the Chinese companies and other entities embraced crypto in their operation to hide “their identities and location.” The DOJ has identified at least three individuals tasked with making crypto payments and OFAC has put five wallets linked to the payments in the spotlight.
Justice Department Announces Eight Indictments Against China-Based Chemical Manufacturing Companies and Employeeshttps://t.co/f37okHaa6z
— Justice Department (@TheJusticeDept) October 3, 2023
The Treasury disclosed that the move is designed to reduce the effectiveness of the drug’s network that involves “millions of USD funds over hundreds of deposits” in cryptocurrencies such as Bitcoin (BTC) and Ether (ETH).
Drug Enforcement Administration (DEA) Administrator Anne Milgram noted that “Fentanyl is the deadliest drug threat” the U.S. has ever faced, adding that Chinese companies are aggravating the crisis by being at the heart of the drug’s supply chain.
Silk Road Founder Marks 10 Years
The fentanyl-linked sanctions come as the founder of the drug-linked anonymous marketplace Silk Road marks ten years in prison. Silk Road hacker James Zhong was jailed for a year in April.
With the DOJ making strides in breaking the fentanyl supply chain, it indicates crypto payments aren’t as anonymous as some may believe.
