Despite that trend away from the dark-web sale of fentanyl, four members of the US Congress this week reintroduced a bill called the Dark Web Interdiction Act to increase sentences for those drug dealers on the dark-web, particularly targeting fentanyl. The bill would also strengthen and make permanent the Joint Criminal Opioid and Darknet Enforcement task force that has helped coordinate law enforcement’s takedown of hundreds of alleged dark-web drug dealers and traffickers recently. years.
But even as the dark-web retail cryptocurrency trade in fentanyl is banned, and while law enforcement units crack down on the rest of it, Elliptic’s research shows that cryptocurrency-based wholesaling of the fentanyl substance to the drug cartels—that produce synthetic opioids. and smuggle it into the US and other countries for sale in the physical world-continues. In its study of precursor-selling chemical labs, Elliptic said several of the websites surveyed specifically mentioned that they shipped to customers in Mexico, and 17 of the labs also sold finished fentanyl and other more powerful opioids.
Those Chinese chemical companies do some cases of selling products other than fentanyl precursors, Elliptic Robinson notes, and he agrees that blockchain analysis cannot tell the difference between sales and sales of fentanyl mixture. Some also sell precursors to amphetamines, methamphetamine, and other opioids. But Elliptic researchers have seen companies advertise that fentanyl precursors are their best-selling products, in some cases. Robinson also noted that Elliptic does not claim to measure the entire crypto-based fentanyl supply chain, but only takes a “snapshot” of the transactions it can identify. This suggests that his $27 million estimate is likely lower than the total value of fentanyl precursor sales over the past half decade.
The US government may be more aware of the activity of fentanyl precursor dealers in China and the role of cryptocurrency, but so far the US has been operating on a smaller scale than the industry discovered by Elliptic. The US Treasury Department last month imposed sanctions against four Chinese men and two chemical laboratories, Wuhan Shuokang Biological Technology and Suzhou Xiaoli Pharmatech, for selling fentanyl precursors to drug cartels. in Mexico. Three of the men were also charged in absentia. The fourth, according to the Treasury announcement, was a partner who accepted cryptocurrency payments for one of the two companies.
The decision by Chinese chemical firms to accept cryptocurrency for their fentanyl ingredient sales may seem counterintuitive, given the ability of companies like Elliptic and other cryptocurrency-tracing firms to track sales of dangerous and potentially illegal products across the globe. blockchains. But Robinson says Chinese companies likely use crypto because it’s difficult to seize or block—and they may not mind the money being tracked by Western companies and law enforcement as long as they can see more. they are a cryptocurrency exchange willing to pay it. outside. “If a Chinese company wants to accept crypto payments, there’s nothing stopping that from happening,” Robinson said.
But traceability also creates an opportunity to pressure cryptocurrency exchanges to cut off the accounts of sellers of the fentanyl precursor identified by Elliptic. Elliptic, in fact, has announced exchanges of hundreds of addresses linked to it by Chinese chemical companies. “There’s definitely a role for services to prevent this,” Robinson said. And exploiting that crypto choke point might cut off at least a portion of the deadly flow of fentanyl around the world—not at its destination, but at its source.
