Chinese fentanyl suppliers willingly accept crypto as payment for their products.
Massachusetts Senator Elizabeth Warren has drawn attention to the potential role of crypto payments in aiding Chinese companies that supply fentanyl precursors, shedding light on a concerning link between digital assets and illegal drug trading.
During a recent hearing of the United States Senate Banking Committee on China held on May 31st, Warren alluded to a report by a blockchain analytics firm Elliptic to indicate a potential relationship between crypto transactions and illicit drug dealings by Chinese enterprises.
Did you know?
Want to get smarter & wealthier with crypto?
Subscribe - We publish new crypto explainer videos every week!
What is Fantom? | Animated FTM Explainer
Elliptic's report from May 23rd revealed that nearly 90% of approximately 90 China-based companies supplying fentanyl precursors expressed a willingness to receive payments in cryptocurrencies, Bitcoin (BTC) being one of them.
During the hearing, Senator Elizabeth Warren noted:
Crypto is supposedly banned in China. <However,> the number of crypto transactions associated with Chinese fentanyl brokers increased by 450% just last year alone.
The assistant secretary for terrorist financing and financial crimes at the US Treasury Department, Elizabeth Rosenberg, confirmed Warren’s assertion, stating that drug brokers in China likely exploit the pseudonymous nature of crypto transactions for payments.
On top of that, Rosenberg echoed Warren's view, stating that crypto was indeed one of the key payment channels for these companies.
Seeking to plug the regulatory gaps that have allowed such transactions to occur, Senator Warren revealed her intentions to reintroduce legislation targeting this issue.
The bill in question, the Digital Asset Anti-Money Laundering Act, was first put forward by Warren in 2022. The senator stated:
Congress has talked about fentanyl long enough. We propose to do something to fight back.
The implications of this issue are far from insignificant. Data from the National Institutes of Health suggests that in 2021, the United States saw over 70,000 deaths caused by an overdose of synthetic opioids, such as fentanyl.
It is not the first time Senator Warren shared her insight into crypto-related matters. At the end of March, Warren urged the US auditing watchdog to crack down on “sham audits” of crypto companies. On top of that, in April, the Senator listed anti-crypto regulations as her top priority for the next term of office.
The concerns raised by Senator Warren underscore the persistent challenges associated with the misuse of cryptocurrencies for illicit activities. The development once again emphasizes the importance of robust regulatory frameworks in the evolving crypto landscape to mitigate illicit activities and enhance the integrity of the digital asset ecosystem.
