Despite the trend away from selling fentanyl on the dark web, four members of the US Congress this week reintroduced a bill called Dark Web Prevention Act to increase sentencing for drug dealers on the dark web, with a particular focus on fentanyl. The bill would also strengthen and permanently transform the Joint Opioid and Darknet Crime Enforcement task force that helped coordinate law enforcement agencies busting hundreds of alleged drug dealers and webmasters. black in recently year.
But even as retail trade of fentanyl in cryptocurrency on the dark web has been restricted and as law enforcement agencies crack down on what’s left of it, Elliptic’s research shows wholesale trading of the ingredients The cryptocurrency-based fentanyl for drug cartels—who then manufacture synthetic opioids and smuggle it into the United States and other countries for sale in the physical world—continues. In its study of chemical labs that sell precursors, Elliptic noted that some of the sites it surveyed specifically mentioned that they had shipped to customers in Mexico, and that 17 labs had also shipped products to customers in Mexico. sell finished fentanyl and other even stronger opiates.
In some cases, those Chinese chemical companies sell products other than fentanyl precursors, Elliptic’s Robinson noted, and he admits that blockchain analysis can’t tell the difference between sales and sales of fentanyl ingredients. Some also sell precursors of amphetamines, methamphetamines and other opiates. But Elliptic researchers have seen companies advertise that the fentanyl precursor is their best-selling product in some cases. Robinson also noted that Elliptic does not claim to have measured the entire crypto-based fentanyl supply chain, but only takes a “snapshot” of transactions it can identify. This suggests its $27 million estimate may be less than the total sales of fentanyl precursors over the past half-decade.
The US government may be increasingly aware of the activities of fentanyl sellers in China and the role of cryptocurrencies, but so far the US has acted on a much smaller scale than the field. that Elliptic discovered. US Treasury last month impose sanctions against four Chinese men and two chemical laboratories, Wuhan Shuokang Biotechnology and Suzhou Xiaoli Pharmaceutical Company, for selling fentanyl precursors to drug cartels in Mexico. Three of the men were also prosecuted in absentia. The fourth person, according to the Treasury announcement, is an associate who accepted cryptocurrency payments on behalf of either company.
The decision of Chinese chemical companies to accept cryptocurrency to sell their fentanyl ingredient may seem counter-intuitive, given the ability of companies like Elliptic and other crypto tracer to track the sale of dangerous and potentially illegal products on blockchains. But Robinson says that Chinese companies are likely to use crypto because it is difficult to capture or block — and they may not be particularly concerned that the funds can be traced by Western companies and authorities. law enforcement as long as they can still find a cryptocurrency exchange willing to exchange cash. outside. “If a company in China wants to accept crypto payments, no one can stop that from happening,” Robinson said.
But traceability also creates an opportunity to pressure crypto exchanges to cut off the accounts of sellers of the fentanyl precursors that Elliptic has identified. In fact, Elliptic has announced the exchange of hundreds of addresses it links to Chinese chemical companies. “Those services certainly have a role to play in controlling this,” says Robinson. And mining that crypto bottleneck could perhaps cut off at least part of the lethal flow of fentanyl around the world—not at its destination, but at its source.
