Elliptic Reveals Chinese Companies in Fentanyl Crisis Received Bitcoin and USDT Payments
The investigative publication by Elliptic on Tuesday, May 22, reveals that Chinese chemical suppliers accepted USDT and Bitcoin payments from Mexican clients. The report unmasks the Chinese businesses that sold chemicals utilized to make Fentanyl readily accepted USDT and Bitcoin as payments.
The blockchain-based specialist in risk management and regulatory compliance assessment indicates that the majority of Chinese-owned pharmaceutical chemical suppliers accept cryptos-based payment. The overwhelming majority of the companies contacted portrayed willingness to ship ingredients for fentanyl that their overseas clients would pay in cryptos.
Investigative Study Links Crypto Wallets with China-based Pharmaceutical Suppliers
The Elliptic investigative study identified most of the chemical suppliers utilizing accounts held in 3 exchanges outside China. However, the report was noncommittal on the specific names.
The analytics firm confirmed notifying the exchanges the China-based pharmaceutical suppliers use by identifying hundreds of wallets that have received over $27 million in cryptos.
Elliptic’s report identified Fentanyl as a cheap-to-manufacture synthetic-based opioid considered extremely powerful than typical heroin. Authorities associated the drug with thousands of overdose-related deaths reported annually in the US.
Elliptic cited statistics published by the National Institutes of Health that linked synthetic opioids with 70600 overdose-related fatalities in 2021 from the 106000 reported in the US. The report linked Fentanyl abuse as the primary cause of fatalities recorded among Americans in the 18-45 years bracket.
Bitcoin and USDT Found to Facilitate Payments to Chinese Suppliers
The blockchain-based analytic observed that over 80 firms of Chinese origin preferred crypto-based settlement for shipping the fentanyl precursors.
Elliptic observed that a leading supplier to Mexico-based customers cited cryptocurrency as the popular settlement method. The anonymous supplier identified that stablecoin tether (USDT) and Bitcoin were regarded as regular payments.
The investigative team Elliptic assembled observed that most of the suppliers encountered ruled out shipping the fentanyl precursors to the US. Instead, Mexico was the Chinese-preferred shipping destination. Drug cartels would then ship the supply to the US.
Elliptic Findings Affirm Discovery Made by Trump Administration
The analytics firm was shocked at the discovery that China-based firms relied on the crypto exchange for payments. The discovery pokes holes into implementing China’s prohibitive policies issued in 2019. Elliptic questioned the seriousness of China restricting access to international exchanges given the country’s resolve to the crypto crackdown.
Elliptic discovery echoes the findings in the previous investigations conducted by the White House. In particular, the White House had in 2019 detailed utilizing Bitcoin and Ethereum as facilitating the payment for fentanyl trafficking.
The two leading cryptos were in use alongside Monero, which. Elliptic is described as a privacy coin that is most preferred in dark web-based markets.
The revelation by Elliptic affirms the observation captured in the Trump administration’s findings that cryptos emerged as the predominant payment options for parties involved in fentanyl trafficking.
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