Bitcoin Leads Crypto Transactions for Chinese Drug Precursor Manufacturers Amid Sharp Increase in 2024 Deposits

  • Blockchain intelligence firm TRM Labs has reported a significant increase in cryptocurrency deposits into addresses linked to Chinese drug precursor manufacturers in early 2024 compared to the same period in 2023.
  • In 2023, these Chinese networks amassed over $26 million in digital currencies, with 97% of the studied manufacturers accepting cryptocurrency payments.
  • A dramatic 600% increase in crypto deposits was noted from 2022 to 2023, with Bitcoin leading the transactions, followed by TRON and Ethereum.

New insights reveal the rapidly growing link between cryptocurrency transactions and the manufacturing of drug precursors by Chinese companies, amidst the rising US fentanyl crisis.

Bitcoin Dominates Transactions

TRM Labs observed a significant surge in the total cryptocurrency deposited into wallets associated with these manufacturers, exceeding 600% growth from 2022 to 2023. Bitcoin continues to dominate these transactions, making up about 60% of the total payment volume. TRON accounts for around 30%, while Ethereum is used in approximately 6% of these transactions.

Notably, 11 manufacturers were found to be responsible for over 70% of all the crypto-based sales for drug precursors. These entities often receive funds from unhosted wallets, various cryptocurrency exchanges, and other digital payment services, with the wallets predominantly hosted at exchanges.

Multifaceted Payment Methods

Besides cryptocurrencies, these Chinese manufacturers also accept traditional fiat currencies through services like PayPal, MoneyGram, Western Union, and standard bank transfers. This multi-pronged approach allows them to cater to a diverse international clientele.

China’s Role in the US Fentanyl Crisis

According to a recent report by a U.S. congressional committee, the root cause of the U.S. fentanyl crisis lies within the People’s Republic of China, which produces over 97% of the precursors required for the global illicit fentanyl trade. This revelation underscores China’s significant role in exacerbating the opioid epidemic in the United States.

The committee’s findings indicate that since 2018, China has been subsidizing the production of these illicit precursors, providing value-added tax rebates to companies that manufacture fentanyl analogs and other synthetic narcotics, provided they export these substances.

Correspondingly, a September 2023 report by blockchain intelligence firm Elliptic uncovered a network of 100 individual suppliers who use cryptocurrencies like Bitcoin, Ethereum, Tron, and Monero to facilitate the trafficking of illicit fentanyl.

International Targets and Marketing Strategies

Chinese manufacturers mainly target countries such as Canada, the Netherlands, Australia, Germany, and the United States. They also direct advertisements toward Russia and neighboring regions, especially marketing precursors for mephedrone. This broad-based marketing strategy ensures a deep and widespread customer base across the globe.

Conclusion

The latest reports from TRM Labs and U.S. congressional findings lay bare the intricate relationship between cryptocurrency usage and the illicit drug trade facilitated by Chinese manufacturers. With the exponential rise in digital currency transactions within this domain, it becomes imperative for global regulatory bodies to adopt a more rigorous approach. The insights gleaned underscore the urgent need for collaborative international efforts to curb this growing menace, aiming for a significant reduction in the global opioid crisis.

Don't forget to enable notifications for our Twitter account and Telegram channel to stay informed about the latest cryptocurrency news.

BREAKING NEWS

AO Blockchain Sees Over 90 Million DAI Deposited for Minting Activity

COINOTAG reports that as of October 5, the scalable...

Grayscale Launches AAVE Trust with 2.5% Management Fee Amid Growing Crypto Investment Options

On October 5, a report from COINOTAG, based on...

Bitcoin Futures Market Signals Local Bottom After Major Long Position Liquidations

The latest analysis from CryptoQuant, reported by COINOTAG on...

Fed’s Rate Cut Strategy Criticized by Summers as Expectations Shift, Reports BlockBeats

In a recent analysis by COINOTAG, it was noted...

Ubisoft Acquisition Talks: Tencent and Guillemot Family Consider Privatization Amid Stock Surge

In the realm of crypto finance, notable developments have...
spot_imgspot_imgspot_img

Related Articles

spot_imgspot_imgspot_imgspot_img

Popular Categories

spot_imgspot_imgspot_img