Cryptocurrency might be playing a significant role in the deadly fentanyl crisis. In a study released by Elliptic, an analytics firm, researchers received offers from more than 90 Chinese companies to supply fentanyl precursors. 90% of them accepted cryptocurrency payments, including Bitcoin and Tether. Over the past year, these suppliers have experienced an alarming 450% surge in the number of crypto payments they received.
The Elliptic study also discovered that the total value of crypto payments made to these suppliers amounted to $27 million. This sum is equivalent to the quantity of chemicals required to produce fentanyl pills with a street value estimated at approximately $54 billion.
These transactions occurred despite Chinese financial companies being prohibited from offering crypto services, and foreign crypto exchanges being barred from serving Chinese clients. However, individuals are not restricted from holding digital assets.
In another significant discovery, the study shed light on the involvement of Dutch national Alex Peijnenburg, an alleged fentanyl supplier. It was revealed that Peijnenburg had sent $85,000 to one of the Chinese companies identified in the study during the period between March 2019 and 2020. The Treasury Department sanctioned Peijnenburg in November for supplying fentanyl and other illicit substances to the U.S. market.
Fentanyl poisoning has become the leading cause of death in the United States for young adults aged 18 to 49, according to a Washington Post analysis of death data from the Centers for Disease Control and Prevention. The majority of the fentanyl entering the country is manufactured in Mexico and China, according to the Drug Enforcement Administration.
“This finding suggests that the trade in fentanyl precursors for crypto can be disrupted by the services that act as gateways into and out of crypto assets,” the report read.