A recent report by blockchain analytics firm Elliptic has highlighted the growing issue of Chinese chemical manufacturers accepting cryptocurrencies as payment for fentanyl ingredients, with transactions totaling more than $27 million. This amount could potentially yield fentanyl with an approximate street value of $54 billion. A staggering 90% of Chinese pharmaceutical chemical companies supplying precursors for this dangerous drug accept crypto payments, such as Bitcoin and Tether.
The firms providing these precursors use accounts with three specific, yet unnamed, exchanges based outside China. Elliptic’s analysis of the crypto wallets unveiled thousands of payments, with a 450% increase in transaction volume year-on-year. Furthermore, over 90 China-based companies responded to offers to supply fentanyl precursors, 90% of which accepted cryptocurrency payments.
Fentanyl, an opioid up to 100 times more potent than morphine, is used medically for treating severe pain. Nevertheless, the illegal form of the drug attracts recreational use due to its intense effects on the body. The potent substance, sold in various forms such as powder, pills, and patches, leads to addiction and life-threatening respiratory issues.
According to Elliptic, shipments of fentanyl or its precursors have been sent to Mexico, where most of the drug entering the United States originates. The majority of fentanyl trafficked in the US is created using precursors imported from Chinese suppliers. In 2021, synthetic opioids such as fentanyl were involved in around 70,600 of the over 106,000 drug overdose deaths in the US, with fentanyl overdoses now being the leading cause of death among Americans aged 18 to 45 years old.
The discovery of more than 80 China-based companies willing to ship fentanyl precursors abroad for cryptocurrencies raises questions about the role that digital currencies play in the illegal drug trade. Notably, 17 of these businesses offered to provide fentanyl itself, and others provided even more potent synthetic opioids that are currently legal to produce and sell in China.
The sale of dangerous opioids like fentanyl through cryptocurrencies has drawn attention to the misuse of digital assets in illicit activities. Even some dark-web markets previously renowned for their anonymity, such as Silk Road and successors like AlphaBay and Hydra, have imposed bans on the drug due to its excessive harm to customers.
While cryptocurrencies have undoubtedly revolutionized the financial industry and present many opportunities, the involvement in illegal dealings, especially regarding dangerous substances like fentanyl, poses a serious challenge. Increasing regulation and oversight of digital transactions could become crucial as authorities attempt to clamp down on this deadly trade.