The White House has issued an advisory to financial institutions on the illicit trafficking of fentanyl, a synthetic opioid that is central to America’s ongoing opioid epidemic.
The advisory states that virtual currencies like “Bitcoin, Bitcoin Cash, Ethereum, and Monero” are used to pay for fentanyl that is either imported directly from China or smuggled across the Mexican border.
“Drug traffickers and consumers increasingly use clearnet and darknet e-commerce markets, paired with online payment systems and virtual currencies, to further anonymise fentanyl purchase and distribution,” the advisory states.
It goes on to discuss the arrest of two prolific darknet fentanyl dealers in 2018: “Their customers made purchases with virtual currency, which the couple then sent to virtual currency exchangers to convert the funds into US fiat currency.”
By Oliver Knight – August 22, 2019
There was also an advisory issued by FinCEN in May that covered the use of ‘convertible virtual currencies (CVCs)’ for money laundering, sanctions evasion, and other illicit purposes, particularly involving darknet marketplaces.
Law enforcement and federal agencies have been snapping at the heels of the illicit drug trade over the past few years, making a series of arrests when busting AlphaBay in 2017 as well as shutting down darknet search engine Deepdotweb earlier this year.
Although the US government is of the belief that the use of Bitcoin, Bitcoin Cash, and Ethereum actually helps anonymise criminals, it actually does the opposite as every transaction is logged on an immutable ledger.
When the criminals go to convert their ill-gotten funds to fiat, there will be a paper trail that could be examined by blockchain forensics, which is more than can be said of the untraceable cash that still dominates the global drug trade.
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