The Financial Crimes Enforcement Network (FinCEN) has issued a warning to US financial firms about the increasing use of cryptocurrencies by Mexican drug cartels to purchase chemicals used in manufacturing fentanyl. The watchdog specifically mentioned the use of Bitcoin, Ethereum, Monero, and USDT in these illegal transactions.
According to FinCEN, criminal organizations in Mexico are increasingly using cryptocurrencies to buy fentanyl precursor chemicals and manufacturing equipment from suppliers in China. These transactions often involve funds being transferred to the suppliers’ wallets through crypto firms and money transmitters.
To combat this illicit activity, financial institutions are advised to enhance their Anti-Money Laundering (AML) programs by incorporating procedures to detect suspicious crypto transactions. They are encouraged to use blockchain analytics to trace virtual currency addresses linked to suppliers in China and Mexican criminal organizations.
The advisory also highlights the importance of sharing information through the FinCEN Exchange initiative to improve the detection and reporting of illicit activities related to the fentanyl supply chain. This is part of the US government’s efforts to address the opioid crisis, which has been declared a national emergency by President Biden.
Fentanyl overdoses have become a leading cause of death for individuals aged 18 to 45 in the US, with the synthetic opioid being 100 times more potent than morphine. The updated FinCEN advisory aims to raise awareness among financial institutions about the sophisticated network of criminal organizations involved in the production and distribution of fentanyl, urging them to take proactive measures to prevent the misuse of cryptocurrencies in this deadly trade.
In addition to imposing sanctions on foreign individuals involved in drug trafficking, the US government is collaborating with international partners to strengthen regulatory and enforcement actions against the illicit fentanyl supply chain. By leveraging the opportunities presented by the increasing use of cryptocurrencies in criminal activities, law enforcement agencies hope to disrupt the fentanyl supply chain and prevent further loss of life due to opioid overdoses.