Bitcoin (BTC), Ethereum (ETH), and various other cryptocurrencies have been utilized by drug cartels in Mexico to purchase crucial ingredients needed to produce the deadly synthetic opioid fentanyl, as per a recent report from the US regulator, the Financial Crimes Enforcement Network (FinCEN). The report reveals that these cartels are using crypto, along with other methods, to procure fentanyl precursor chemicals, pill presses, die molds, and manufacturing equipment from Chinese companies. FinCEN, an agency under the US Department of the Treasury responsible for combatting money laundering and terrorism financing, highlights that the cartels are also conducting transactions using the stablecoin USDT and the privacy coin Monero (XMR), among other cryptocurrencies. According to FinCEN, the drug-smuggling organizations transfer crypto to individuals associated with Chinese suppliers or to secondary money transmitters with hosted wallets at virtual asset service providers. However, it is not just cryptocurrencies that are being leveraged; the US regulator also points out that the cartels rely on banks, money services businesses (MSBs), and online payment processors to acquire fentanyl-producing materials. Many of these transactions are conducted in US dollars through US correspondent banks, domestic online payment processors, and agents of American MSBs based in Mexico and China. Furthermore, the drug cartels employ shell companies that mimic legitimate Chinese exporters and Mexican importers, according to FinCEN.
