News - Fentanyl crisis: Chinese drug suppliers get paid in Bitcoin
The export of fentanyl to the U.S. is strictly prohibited in China. Nevertheless, the drug finds its way to the United States through detours.
On-chain analysis company Elliptic reveals in a recent research report that the Chinese companies involved in the fentanyl trade are paid in cryptocurrencies. The companies export chemicals needed to produce the drug to "Mexican customers." These "always pay with USDT or Bitcoin," a supplier informed Elliptic.
In Mexico, the chemicals are then processed into fentanyl after which it is exported to the US. A veritable epidemic of the drug has broken out in the United States. According to a study by the National Institutes of Health, 106,699 Americans in the U.S. died of overdoses in 2021 alone.
In 2019, under pressure from the United States, the Chinese government banned the export of fentanyl. As a result, suppliers began increasingly using Mexican drug gangs as a workaround.
The research team identified more than 90 China-based chemical companies that were willing to supply fentanyl precursors using cryptocurrencies as a payment method. Blockchain analyses showed that these wallets received thousands of crypto payments with a total value of just over US$27 million. The associated crypto exchanges were notified accordingly.