Elliptic: fentanyl precursor shipments from China to the US paid in bitcoins

USDT and Bitcoin are the most common payment methods used by 81 of the 90 fentanyl precursor suppliers, which spurred an ‘epidemic’ in the United States, according to Elliptic analysts.

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— Elliptic (@elliptic) May 23, 2023

Analysts noted that thousands of payments totaling more than $27 million were directed to wallets used by these companies. Over the year, the number of transactions rose by 450%. From that total, end products worth $54 billion could be produced.

Two-thirds of receipts came in Bitcoin, with only 1% in digital assets other than Bitcoin and USDT.

One of the largest fentanyl traders paid $84,598 in Bitcoin to a supplier in Elliptic’s sample between March 2019 and May 2020.

The White House said on April 11 that it intends to “expand efforts to curb illicit financing of such criminals through sanctions”.

On April 14, the U.S. Treasury imposed restrictions on a number of individuals and entities from China for supplying fentanyl precursors to Mexican drug cartels. The notice also lists the cryptocurrency wallets used by them.

Elliptic specialists, posing as potential buyers, engaged in dialogue with the suppliers and confirmed the viability of payments in digital assets.

“They always use USDT or Bitcoin. … This is not a problem,” they told them.

Analysts identified three exchanges based outside China that complied with AML requirements, whose services were used by fentanyl precursor manufacturers. AML-requirements

Specialists handed them “hundreds of addresses” for blocking, and pledged to continue supporting efforts to prevent the use of cryptocurrency by suppliers of drug ingredients.

As reported in May 2023, Europol closed the darknet marketplace Monopoly Market, seizing €50,8 million ($53,4 million) in digital assets and cash. In addition to the money, authorities seized 850 kg of synthetic drugs and 117 units of firearms.