Unveiling the Fentanyl-Crypto nexus: Elliptic’s report sheds light on Chinese suppliers

Chinese banks enter the Hong Kong market, facilitating local Crypto firms

Today, a report released from Elliptic allowed 90 Chinese countries to supply the precursor of Fentanyl to the United States. Additionally, over 90% of these firms have used cryptocurrency as their preferred payment method. For those who are not aware, Elliptic is a company that provides blockchain and crypto compliance solutions. 

Fentanyl is a drug that is used to take immediate relief from the pain. Reportedly, the Elliptical found that most fentanyl trafficked into the United States is manufactured using precursors imported from Chinese suppliers. The researchers from the firm have received offers from more than 90 Chinese companies and shockingly 90% of these companies accepted cryptocurrency.

Additionally, the Elliptical has closely analyzed the crypto wallets used by the companies. They found that firms have received payments totaling over $27 million. Also, there have been 450% more transactions this year than last. Of course, the $27 million is insignificant in light of the rumored billions of dollars in the Chinese fentanyl export business.

China has been a crucial part of fentanyl for a very long time but it has banned the drug in 2019. The decision was taken because of the bad diplomatic relations between the United States and the United Kingdom. Additionally, the UK and the US are trying to prevent the expansion of the fentanyl market and have taken multiple steps to prevent it. 

In November 2022, the United States Securities and Exchange Commission imposed sanctions on associates related to fentanyl for allegedly supplying fentanyl and other synthetic drugs to buyers through the Internet. The restrictions were imposed on two Dutch nationals and one British resident. 

The move was the first of its kind when the Treasury imposed sanctions under a new authority that President Joe Biden granted in an executive order in 2021. Anyone connected to “the international proliferation of illicit drugs or their means of production” could face financial restrictions thanks to this law, which was implemented by the Treasury.

The United States authorities have been working hard to restrict the fentanyl crisis, with international organizations like the International Monetary Fund (IMF) working on cooperation. In early May, regulators arrested nearly 300 personnel for their involvement in a dark web fentanyl market. The authorities also confiscated $53 million in fiat and cryptocurrencies.

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