The latest research by the blockchain analytics company Elliptic identified that centralized exchanges including Russian crypto firm Garantex have been facilitating the purchase of fentanyl-precursor chemicals from China. The report revealed that the crypto-denominated purchases of the fentanyl-precursor chemicals or pill presses largely saw the transactions of Bitcoin (BTC) and Tether (USDT).
As per Elliptic’s report released on Thursday, China is the primary producer and exporter of fentanyl and its precursors, a dreadful drug that has become a prime agent for the death of Americans. The report, which came following an earlier report in May, delved deep into the role of digital currencies in the trade of fentanyl and identified that the Chinese sellers accepted cryptocurrencies as a mode of payment.
In the previous report, Elliptic exposed that the Chinese suppliers of the drug have been receiving millions of dollars in cryptocurrency as their payments. While in May’s report, it was identified that more than 90 Chinese chemical companies received $27 million in crypto payments, the recent report highlighted that the crypto payments in fentanyl-precursors exceeded $32 million.
Reportedly, most of the crypto payments were connected to the customers of centralized exchanges. The Russian exchange Garantex, currently sanctioned by the United States, and an unnamed Australian exchange are identified by Elliptic as the major intermediaries of the crypto transactions.
Accessing the dealers’ payment addresses, the researcher traced transaction details and identified that tens of millions of dollars in BTC and USDT were transferred as payments for the deadly chemicals. In particular, assets sent to the dealers’ accounts included $19 million in BTC, $9 million in Tron-based USDT, and $4 million in Ethereum-based USDT.
The report also stated that though the Chinese government has banned the export of fentanyl, the sellers manage to sell the chemical precursors to Mexican cartels including Sinaloa Cartel and Cartel Jalisco Nueva Generacion. Elliptic added, “Despite legal restrictions, crypto continues to be accepted as a means of payment for fentanyl precursors and other associated wares”.
