US Treasury Adds Crypto Wallets to SDN List for Fentanyl Trade
The United States Treasury’s Office of Foreign Assets Control (OFAC) has added several crypto wallets to its specially designated nationals (SDN) list. These wallets are associated with individuals and companies involved in the illegal fentanyl trade, primarily based in China. The drug trafficking network used various cryptocurrencies to facilitate their operations.
In total, six entities, including five individuals and one company called Valerian Labs, have been flagged by the government. According to blockchain surveillance firm Chainalysis, these addresses collectively received nearly $3.8 million worth of cryptocurrency, which represents a significant amount of potentially trafficked drugs into the US and other countries.
Illicit Transactions and Wallet Addresses
OFAC’s action identified a total of 17 wallet addresses across Bitcoin, Ethereum, and Tron networks. Most illicit transactions on Ethereum and Tron were received through stablecoins, which are crypto tokens backed by fiat currencies like the US dollar.
The five individuals’ wallets, along with Valerian Labs’ wallet, are hosted at a centralized crypto exchange that remains unnamed. Each wallet received funds through a series of small transfers in consistent amounts from personal wallets and other mainstream exchanges. This pattern of consistent payments indicates the sale of specific goods related to fentanyl and precursor chemicals.
Rising Crypto-based Fentanyl Sales
Crypto-based fentanyl sales have been increasing globally. Chainalysis published a report revealing that China-based fentanyl sellers have received $37.8 million worth of cryptocurrency since 2018.
This recent action by OFAC is the first to target Tron addresses. Previously, the Treasury sanctioned Bitcoin addresses linked to such suppliers. Last month, an Ethereum address tied to a member of a Mexican money laundering network was also sanctioned for using crypto to transfer fentanyl proceeds across the border.
Preventing Cryptocurrency Abuse by Drug Traffickers
The sanctions against individuals and businesses involved in this criminal network are seen as an important step in preventing the abuse of cryptocurrency by drug traffickers. Chainalysis emphasizes that this action serves as a reminder of the depth of the problem.
Hot Take: US Treasury Adds Crypto Wallets to SDN List to Combat Fentanyl Trade
The US Treasury’s OFAC has taken action against crypto wallets linked to illegal fentanyl trade, adding them to its SDN list. These wallets, associated with individuals and companies primarily based in China, were used to facilitate drug trafficking operations. The government flagged six entities, including Valerian Labs, and identified 17 wallet addresses across Bitcoin, Ethereum, and Tron networks.
Most illicit transactions on Ethereum and Tron involved stablecoins. The wallets received funds through consistent small transfers from personal wallets and mainstream exchanges, indicating the sale of fentanyl and precursor chemicals. Crypto-based fentanyl sales have been on the rise globally, with China-based sellers receiving millions worth of cryptocurrency since 2018.
This is the first time OFAC has targeted Tron addresses. The Treasury has previously sanctioned Bitcoin addresses linked to such suppliers. The recent action is aimed at preventing the abuse of cryptocurrency by drug traffickers and highlights the severity of the issue.
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