Criminals often express their favoritism toward cryptocurrencies. The perceived privacy and anonymity associated with this payment method makes for an excellent tool. In the US, the Treasury is now targeting Chinese drug kingpins. More specifically, they are monitoring Bitcoin revenue streams. That form of payment has become all the more prominent as time went by.
The vast majority of drugs and other narcotics consumed in the United States is not home-grown. It is often imported from countries such as Colombia, Mexico, and in a fair few cases, even China. Particularly where opioids are concerned, Chinese drug dealers are playing an increasing role of importance. They are also involved in shipping fentanyl analogues and cannabinoids, among other substances.
Several arrests were made in August of 2018. At that time, the US Attorney’s Office highlighted an indictment in federal court in Ohio. Two Chinese individuals – who are father and son – were charged with operating, manufacturing, and shipping various illegal substances. It is believed they served customer sin at least three dozen US states and over two dozen countries in total. It appears some of their business was conducted on the darknet, albeit exact details have not been provided as of yet.
Organized crime groups – or even entrepreneurial individuals – will seek out payment methods which can mask their identity. Bitcoin and other cryptocurrencies continue to play an increasing role of importance in that regard. Although Bitcoin isn’t private nor anonymous, it is often perceived in such a manner. Most of the drug proceeds generated by these two Chinese individuals were laundered through multiple cryptocurrencies, including Bitcoin.
To be more specific, the OFAC has monitored Bitcoin addresses allegedly associated with these drug dealers. How this information was obtained, is unknown at this time. It seems plausible to assume several deals were made by these Chinese individuals as part of the ongoing investigation. That would indicate the criminals continued to use the same Bitcoin addresses over and over again. Given the vast number of blockchain analysis companies, it is not overly difficult to put one and one together.
Under Secretary for Terrorism and Financial Intelligence Sigal Mandelker explains:
“The Chinese kingpins that OFAC designated today run an international drug trafficking operation that manufactures and sells lethal narcotics, directly contributing to the crisis of opioid addiction, overdoses, and death in the United States. Zheng and Yan have shipped hundreds of packages of synthetic opioids to the U.S., targeting customers through online advertising and sales, and using commercial mail carriers to smuggle their drugs into the United States. OFAC and FinCEN’s coordinated action with U.S. law enforcement leverages Treasury’s authorities to confront the deadly synthetic opioid crisis plaguing America.”
Based on this information, one has to wonder if this is a two-man operation. Shipping hundreds of packages is not as labor-intensive as one may think. However, international drug trafficking operations on this scale are often run by a much larger crew. These two Chinese drug dealers may be small fish leading to a bigger whale if the investigation is successful. The Bitcoin transactions themselves may shed more light on how this operation was run exactly.
Source: The Merkle