Chinese Companies Charged by US DOJ for Using Cryptocurrencies in Fentanyl Trade

By: Eliza Bennet

The U.S. Department of Justice (DOJ) has unsealed eight indictments related to crimes implicating several China-based companies in the fentanyl trade and use of cryptocurrency for their transactions. These crimes involve the production of fentanyl and methamphetamine, distribution of synthetic opioids, and sales linked to precursor chemicals.

Cryptocurrency transactions reportedly facilitated the concealment of their identities and obfuscation of money trails. Participants of these crimes, such as two individuals linked to Hebei Shenghao Import and Export Company, held crypto wallets for remittances related to precursor chemicals used in drug production. Another individual associated with the Hubei Guanlang Biotechnology Company allegedly operated a cryptocurrency wallet birthing transactions for sales of fentanyl precursors and opioid additives.

The Treasury's Office of Foreign Assets Control (OFAC) has also imposed sanctions on engagers in these drug transactions. This resulted in limiting a total of 19 cryptocurrency addresses including wallets hosting Bitcoin, Ethereum, Tether, and Tron. Majority of the crypto addresses are traced back to five individuals connected to the fentanyl and drug trade. Additionally, sanctions have been placed on Du Changgen, who's been identified as the leader of the criminal drug syndicate, receiving personal cryptocurrency.

These recent series of actions by the U.S. authorities denote developments in combating the use of cryptocurrency in the fentanyl trade. In fact, the community witnessed similar action against Chinese fentanyl companies earlier this year, some of whom had utilized cryptocurrency for transactions as well.