Mexican Cartels Exploit Bitcoin, Ethereum, Tether To Fund Fentanyl Production By Benzinga

Benzinga – By Murtuza Merchant, Benzinga staff writer.

According to the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN), Mexican criminal networks are using popular cryptocurrencies to fund the procurement of raw materials for fentanyl production.

what happenedThe advisory, released Thursday, highlights the growing use of digital assets such as: Bitcoin (Cryptocurrency: BTC) Ethereum (Cryptocurrency: ETH), Monero (Cryptocurrency: XMR) and Tether (CRYPTO: USDT) is used by these organizations to purchase precursor chemicals from suppliers based in China.

The advisory details that the cartel is “increasing its purchases of fentanyl raw chemicals and manufacturing equipment” from Chinese suppliers, and is using a variety of cryptocurrencies to pay for these transactions.

FinCEN’s updated notice is intended to alert U.S. financial institutions to the complex network of criminal organizations involved in the production of this deadly drug.

As outlined in the advisory, payments often arrive at wallets hosted by cryptocurrency companies at Chinese suppliers, sometimes mediated by secondary remittance agents.

This practice not only complicates tracing illicit funds but also highlights the growing intersection of digital finance and international drug trafficking.

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Why is this important?: This update of the 2019 FinCEN Advisory highlights continuing issues observed in sanctions and criminal cases handled by U.S. authorities.

In a notable case in October, the US Department of Justice charged eight China-linked companies with manufacturing, distributing and selling precursor chemicals for illegal drugs.

Fentanyl overdose is the leading cause of death among Americans ages 18 to 45. The chemicals used to make the drug are often produced in China and pass through multiple borders on their way to U.S. consumers.

The Drug Enforcement Administration (DEA) says fentanyl is about 100 times more potent than morphine and poses a major public health crisis.

As the United States combats the fentanyl epidemic and its devastating impact on communities, these developments highlight the urgent need for greater cooperation between financial institutions and regulators to curb the illicit use of digital assets.

What’s next: For those interested in exploring the future of digital finance and regulatory trends, Benzinga’s “The Future of Digital Assets” event on November 19th will provide valuable insight and discussion on these pressing issues.

Read next: Binance fined $2.25 million by India’s Financial Intelligence Unit for violating anti-money laundering laws

This content was produced in part with the help of AI tools and was reviewed and published by Benzinga editors.

Image: Shutterstock

© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.

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