OFAC Sanctions Bitcoin Wallets Used By Chinese Companies and Nationals for Fentanyl Trafficking

Jimmy Aki
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The US Department of Treasury has announced a new round of indictment of Bitcoin wallets used in transferring funds for illicit drug production.

China-based Companies and Employees Indicted

In an October 3, 2023 press release, the Office of Foreign Assets Control (OFAC) announced new indictments in the Middle and Southern Districts of Florida against 28 China-based companies and their employees.

According to the US government agency, the subjects were involved in crimes around fentanyl and methamphetamine production, distribution of opioid products, and sales obtained from precursor chemicals.

Providing more context, the Department of Treasury stated that five indictments were originally leveled against five Chinese companies and eight Chinese nationals.

These subjects were charged with illegally importing fentanyl and fentanyl-related products into the North American nation.

To achieve their aim, the indicted individuals reportedly used fake shipping labels and special delivery procedures to ensure that the illegal drugs went undetected at the border.

The eight defendants coordinated and supplied the goods within Florida and sent back the proceeds using cryptocurrency wallets.

According to OFAC, they relied on several crypto wallets to move their funds safely undetected.

Among the indicted individuals, 34-year-old Mingming Wang managed three separate Bitcoin wallets through which funds were transferred to Lihe Pharmaceutical in China.

A similar scenario unfolded in the Southern District of Florida, where three Chinese companies and four employees faced charges related to fentanyl trafficking, synthetic opioid trafficking, and precursor chemical importation.

Additional charges included defrauding the US Postal Service and using counterfeit postage.

Meanwhile, the crackdown was done in collaboration with the US Homeland Security Investigation (HSI), the Drug Enforcement Agency (DEA), and the US Customs and Border Protection.

The three-tiered government operation led to the seizure of 1,000 kilograms of fentanyl-related precursor chemicals and the tracking down other precursor chemicals mailed through the Postal Service.

Following these remarkable busts, all the individuals and Chinese companies involved in importing and laundering funds from fentanyl sales and synthetic opioids have been added to the US Specially Designated Nationals – a national black book.

Speaking on the indictments, Deputy Attorney General Lisa O. Monaco said it is a form of down payment on the Department of Justice’s pledge to every American family who has lost a loved one to fentanyl poisoning.

“Just as we did in the fight against terrorists and cybercriminals, we’re deploying a whole-of-government approach – sharing intelligence, combining resources, and relentlessly pursuing justice –to attack the global supply chain

fueling the fentanyl crisis. We will not rest until we rid our communities of this poison,” she added.

A Transnational Cartel Enterprise

The fentanyl crisis in the United States is escalating as criminals make concerted efforts to flood the North American market with this poisonous drug.

Aside from the Chinese, the Sinaloa cartel operating out of Mexico is also a known fentanyl exporter to the US market.

In a September 26 press release by OFAC, 10 individuals affiliated with the Sinaloa cartel were added to the Specially Designated Nationals record for illicit fentanyl distribution and sales.

The individuals were linked to the Los Chapitos faction of the infamous Mexican cartel and used an Ethereum-based wallet to move their illicit drug proceeds.

Besides using a crypto wallet, the indicted individuals used wire transfers, special US-based couriers, and many other methods to launder funds out of the US.

Fentanyl has become a menace in the US, with an estimated 67,000 lives lost to the drug in 2021 alone. This figure represents a 26% increase from the 53,480 fatalities recorded in 2020.

About Jimmy Aki PRO INVESTOR

Based in the UK, Jimmy is an economic researcher with outstanding hands-on and heads-on experience in Macroeconomic finance analysis, forecasting and planning. He has honed his skills having worked cross-continental as a finance analyst, which gives him inter-cultural experience. He currently has a strong passion for regulation and macroeconomic trends as it allows him peek under the global bonnet to see how the world works.