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

Criminal networks in Mexico are leveraging popular cryptocurrencies to finance the procurement of raw materials for fentanyl production, according to the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN).

What Happened: The advisory, released on Thursday, highlights the increasing use of digital assets such as Bitcoin BTC/USD, Ethereum ETH/USD, Monero XMR/USD and Tether USDT/USD by these organizations to purchase precursor chemicals from suppliers based in China.

The advisory details how cartels are “increasingly purchasing fentanyl precursor chemicals and manufacturing equipment” from Chinese suppliers and paying for these transactions using various cryptocurrencies.

The updated FinCEN notice aims to alert U.S. financial institutions to the complex network of criminal organizations involved in the production of this deadly narcotic.

Payments often reach the Chinese suppliers’ wallets hosted by crypto firms, sometimes facilitated by secondary money transmitters, as outlined in the advisory.

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

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Why It Matters: This update to the 2019 FinCEN advisory underscores ongoing issues observed in sanctions and criminal cases handled by U.S. authorities.

In a notable incident from October, the U.S. Department of Justice charged eight China-linked companies with illegal drug production, distribution, and the sale of precursor chemicals.

Fentanyl overdoses have emerged as the leading cause of death for Americans aged 18-45, with chemicals for manufacturing the drug often originating in China and traversing multiple borders before reaching U.S. consumers.

The Drug Enforcement Administration (DEA) has noted that fentanyl is approximately 100 times more potent than morphine, making it a significant public health crisis.

As the U.S. grapples with the fentanyl epidemic and its devastating impact on communities, these developments highlight the urgent need for enhanced cooperation between financial institutions and regulatory bodies 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 Future of Digital Assets event on Nov. 19 will provide valuable insights and discussions on these pressing issues.

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

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