- The U.S. Department of Treasury has imposed sanctions on Chinese chemical companies and individuals involved in illegal fentanyl production and trafficking.
- The sanctions target 19 cryptocurrency wallets associated with these actors, blocking millions of USD in funds, including Bitcoin, Ether, Tether, and Tron.
- The U.S. Justice Department indicted China-based chemical manufacturers and employees for using crypto transactions in an illegal fentanyl precursor distribution scheme.
The U.S. Department of Treasury has sanctioned crypto wallets of Chinese chemical companies and persons linked to fentanyl manufacture and trafficking.
According to Deputy Treasury Secretary Wally Adeyemo, during a press briefing on Tuesday, the restricted wallets appear to have “received millions of USD funds over hundreds of deposits.”
“We have identified and blocked over a dozen virtual currency wallets associated with these actors.” He noted.
According to the Office of Foreign Assets Control (OFAC), the move involved 19 crypto wallet addresses, which were added to the list of specially designated nationals (SDN). Bitcoin (BTC), Ether (ETH), Tether (USDT), and Tron (TRX) are all stored in these wallets.
“If you benefit from the proceeds of this illicit activity, we are going to come after your assets,” Adeyemo warned.
The Department of Justice Announces Eight Charges Against Chinese Chemical Companies
The U.S. Department of Justice (DOJ) announced the unsealing of eight indictments against Chinese-based organizations and personnel in connection to the production and sale of substances such as fentanyl and methamphetamine in addition to the sanctions.
These Chinese chemical firms “tend to use cryptocurrency transactions to conceal their identities as well as the location and movement of their funds,” the DOJ noted.
The U.S. government named Qingsong Li and Chunhui Chen, who “allegedly maintain cryptocurrency wallets for the remittance of payments of precursor chemicals.” Wei Zhang, another Chinese national, runs a Bitcoin wallet that accepts payments for Hubei Guanlang Biotechnology Company’s medicine sales, which include opioid additives.
Dozens of DOJ agents, analysts, and prosecutors were involved in hunting down the criminals, according to Deputy Attorney General Lisa O. Monaco. “It also reflects teamwork from across the Federal government,” Lisa added, adding that agents from the US FBI and IRS tracked crypto transactions using the blockchain.
“Our agents and prosecutors combined old-school techniques like officers going undercover with cutting-edge tools like cryptocurrency tracing.”
Cryptocurrency Enforcement
Other authorities have also cracked down on the usage of cryptocurrency to distribute drugs. Last Monday, the Treasury Department’s Office of Foreign Assets Control sanctioned a member of Mexico’s Sinaloa Cartel for using an Ethereum wallet to transmit assets related to fentanyl smuggling into the United States.
Lawmakers in the United States have expressed worry about using crypto in money laundering and drug trafficking. Senators Elizabeth Warren, D-Mass., Joe Manchin, D-W.Va., Roger Marshall, R-Kan., and Lindsey Graham, R-S.C. proposed legislation in July to bring cryptocurrency into compliance by tightening money laundering and KYC rules.
