Bitcoin-facilitated fentanyl sales fell after U.S. sanctions

Inflow of cryptocurrency to addresses linked to darknet fentanyl suppliers slowed during 2023. This drew the attention of analysts at TRM Labs, who track more than 100 such wallets.

According to them, in January the drug sellers took in around $2 million in cryptocurrency; by May this figure had fallen to roughly $1.2 million. Despite a spike in August to more than $2.5 million, by October the figure had dropped below $1 million.

Analysts attribute the fall in drug sales to sanctions by OFAC and to the US Department of Justice charges against fentanyl suppliers.

“OFAC’s actions likely disrupted supply chains, as they increased the risks of dealing with targeted precursor producers,” they noted.

In particular, they cited sanctions against a network of Chinese fentanyl manufacturers and the Mexico-based Sinaloa cartel, as well as a major seizure of the drug shipped to the United States from China in October.

Since 2019, fentanyl-linked flows tracked by TRM Labs had grown at an average annual rate of 155%. In 2023, growth was only about 60%, the firm said.

Earlier in October, the U.S. DOJ filed criminal cases against eight Chinese companies and 14 of their employees for distributing drugs using digital assets.

Earlier, Elliptic analysts described a scheme of fentanyl shipments from China for cryptocurrency. According to the analysts, Chinese suppliers of the synthetic opioid hold on wallets more than $32 million.