White House Advisory Says Virtual Currencies Used for Fentanyl Purchases
The White House issued two advisories on drug purchases in the United States today with specific references to cryptocurrencies.
The advisories, addressed to both financial institutions and digital payment platforms, state that “convertible virtual currencies” (CVC), particularly bitcoin, bitcoin cash, ethereum, and monero, can be and have been used for illicit substance purchases on the clear, deep, and dark nets.
The advisory defines CVC’s as virtual currencies easily liquidated into stable fiat currencies such as the dollar.
Specifically noted is the drug fentanyl, a Schedule II controlled substance whose illicit cousin enters the United States through Mexico or China, per the advisories.
According to the Drug Enforcement Agency, fentanyl is 80 to 100 times stronger than morphine.
“An analysis of sensitive financial data indicates that domestic illicit drug manufacturers, dealers, and consumers use online payment platforms or CVC to purchase precursor chemicals or completely synthesized narcotics primarily sourced from China,” the advisory states.
The White House issued the financial advisory with other government agencies as a part of a broader cooperative effort “to end the fentanyl epidemic.” As such, methods of payment were studied, including virtual currencies.
The July 2017 takedown of dark market AlphaBay by U.S. officials is given as an example of past interaction between virtual currencies and illicit substances.
Included in the report is authority methods of tracking and discovery payments for illicit substances using CVC’s such as wallet and IP addresses along with transaction hashes.
Earlier today, the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) blacklisted three Chinese nationals for money laundering and drug smuggling laws.
Drugs image via CoinDesk archives
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William Foxley, Khareem Sudlow