The United States Department of the Treasury’s Office of Foreign Assets Control (OFAC) has imposed sanctions on cryptocurrency wallets allegedly associated with individuals and companies involved in the production of fentanyl.
On October 3rd, the U.S. Justice Department disclosed indictments against various chemical manufacturers based in China, along with numerous employees allegedly engaged in an illicit distribution scheme of fentanyl precursors. U.S. authorities claim that these entities frequently employed cryptocurrency transactions to obscure their identities, as well as the origin and flow of their finances. Notably, at least three individuals were identified as holders of cryptocurrency wallets used for payments.
OFAC has now included Bitcoin (BTC), Ether (ETH), USD Coin (USDC), Tether (USDT), and Tron (TRX) wallets associated with Chinese nationals and Valerian Labs on its list of Specially Designated Nationals. This list also encompasses companies such as Hanhong Pharmaceutical Technology and Hebei Crovell Biotech. Deputy Treasury Secretary Wally Adeyemo clarified that this enforcement action aims to disrupt an unlawful drug network.
Adeyemo stated, “We have discovered and restricted more than a dozen virtual currency wallets linked to these individuals. These blocked wallets have received millions of dollars through numerous deposits, underscoring the extensive scale of the operation targeted today.”
Numerous legislators have called for measures to combat the distribution of fentanyl in the United States, where the drug was held accountable for over 67,000 deaths in 2021. Senator Elizabeth Warren of Massachusetts, a vocal critic of digital assets, highlighted potential connections between cryptocurrency payments and drug trafficking during a hearing in May.
Additionally, the first week of October marked the 10th year of imprisonment for Ross Ulbricht, the creator of the online marketplace Silk Road. Silk Road faced substantial criticism for facilitating the drug trade through digital asset payments, though Ulbricht still retains support within the cryptocurrency community.