Mexican drug cartels used Bitcoin (BTC), Ethereum (ETH) and other major cryptocurrency assets to buy key ingredients to make the deadly synthetic opioid fentanyl, according to a new report from U.S. regulators.
The Financial Crimes Enforcement Network (FinCEN) said the cartels use cryptocurrency and a variety of other methods to purchase fentanyl precursor chemicals, pill presses, molds and other manufacturing equipment from Chinese companies.
FinCEN is an agency within the U.S. Treasury that cracks down on money laundering and terrorist financing.
In addition to BTC and ETH, the cartel is also known to trade cryptocurrency assets such as USDT, the leading stablecoin, and Monero (XMR), a privacy coin.
FinCEN said drug smuggling organizations would send cryptocurrency to secondary senders using wallets hosted by people linked to Chinese suppliers or virtual asset service providers.
But it’s not just cryptocurrencies. U.S. regulators have noted that cartels rely on banks, financial services businesses (MSBs) and online payment processors to obtain fentanyl production materials.
FinCEN said many of these transactions are settled in dollars through U.S. correspondent banks, domestic online payment processors, and U.S. MSB agents in Mexico and China.
Drug cartels also use front companies designed to look like legitimate Chinese exporters and Mexican importers, according to regulators.
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