- On October 3, 2023, the U.S. Treasury’s Workplace of International Property Management (OFAC) imposed sanctions.
- These sanctions focused people and firms concerned in manufacturing and distributing harmful medicine, together with fentanyl and precursor chemical compounds.
- Notably, the sanctions additionally prolonged to cryptocurrency addresses related to the sanctioned entities.
The U.S. Treasury’s Workplace of International Property Management (OFAC) introduced sanctions on October 3, 2023. The sanctions focused a number of people and firms concerned within the manufacturing and distribution of harmful medicine, together with fentanyl and precursor chemical compounds. Notably, these sanctions additionally prolonged to cryptocurrency addresses related to the sanctioned entities.
Blockchain analytics agency Chainalysis revealed a report analyzing cryptocurrency exercise associated to latest US sanctions in opposition to a China-based drug trafficking community.
The entities on the heart of the OFAC’s motion kind a sprawling drug trafficking community, based mostly in China and involving one Canadian nationwide and two Canadian companies below their possession.
In keeping with the report, one putting facet of this OFAC motion is the connection between cryptocurrency and the drug commerce. The cryptocurrency addresses related to the sanctioned people and firms spanned the Bitcoin, Ethereum, and Tron blockchains. Notably, addresses on Ethereum and Tron primarily obtained stablecoins like USDT and USDC, aligning with the pattern of utilizing stablecoins for illicit transactions.
Except addresses linked to a Valerian Labs, a Canadian firm that describes itself as a “manufacturing facility that manufactures and bottles all varieties of drinks”, all of those addresses had been hosted on a mainstream change referred to right here as “Core Alternate.” Funds flowed into these addresses from each private wallets and different mainstream exchanges, primarily six completely different ones.
In keeping with the report, every of the 5 people obtained substantial sums of cryptocurrency, sometimes in constant quantities. This sample strongly suggests the sale of particular items, on this case, fentanyl and its precursor chemical compounds.
For example, a detailed examination of deposit addresses related to Shen Xianbiao, one of many sanctioned people and a part-owner of Jinhu Minsheng Pharmaceutical Equipment, revealed that the majority transactions from private wallets fell inside the slender vary of $5,000 to $5,500 value of cryptocurrency.
Moreover, these addresses obtained substantial quantities from darknet markets, indicating that they might characterize distributors buying medicine or precursor chemical compounds from these labs for subsequent resale.
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