The US Treasury Sanctions Cryptocurrency Wallets Associated with Fentanyl Trade
The United States Treasury’s Office of Foreign Assets Control (OFAC) has imposed sanctions on several cryptocurrency wallets connected to the illegal fentanyl trade. In an effort to target a drug trafficking network primarily based in China, OFAC added a new set of crypto wallets to its specially designated nationals (SDN) list. These wallets were used by six entities, including five individuals and one company named Valerian Labs, to facilitate their illicit operations.
A total of 17 wallet addresses were flagged by the government, covering Bitcoin (BTC), Ethereum, and Tron networks. The majority of illegal transactions on Ethereum (ETH) and TRON (TRX) networks involved stablecoins, which are cryptocurrency tokens backed by fiat currencies like the US dollar.
According to blockchain surveillance firm Chainalysis, these addresses collectively received almost $3.8 million worth of cryptocurrency, potentially representing significant quantities of drugs trafficked into the US and other countries.
Wallets Received Funds in Small Amounts
Chainalysis’ investigation revealed that these wallets received funds through a series of small transfers in consistent amounts from personal wallets and other mainstream exchanges. This payment pattern suggests the sale of specific goods, such as fentanyl and associated precursor chemicals.
Crypto-based fentanyl sales have been increasing globally, with China-based fentanyl sellers alone receiving approximately $37.8 million worth of cryptocurrency since 2018. While Bitcoin addresses linked to such suppliers have been previously sanctioned by the US Treasury, this is the first time Tron blockchain addresses have been targeted.
Last month, OFAC also sanctioned an Ethereum address associated with a member of a Mexican money laundering network who allegedly used crypto to transfer fentanyl proceeds across the border.
Hot Take: US Treasury Sanctions Cryptocurrency Wallets Involved in Fentanyl Trade
The US Treasury’s Office of Foreign Assets Control (OFAC) has taken action against cryptocurrency wallets associated with the illegal fentanyl trade. By imposing sanctions on these wallets, which were used by entities involved in drug trafficking, the government aims to disrupt their illicit activities. The use of stablecoins for most of the illegal transactions highlights the importance of addressing regulatory concerns surrounding these types of cryptocurrencies. Chainalysis’ investigation revealed significant amounts of cryptocurrency flowing into these wallets, indicating the potential scale of drug trafficking facilitated through digital assets. This latest move by the US Treasury demonstrates their commitment to combatting illicit activities within the cryptocurrency space.
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