Central Louisiana News

U.S. Senators Bill Cassidy (R-LA) and Elizabeth Warren (D-MA) have requested an update from the White House Office of National Drug Control Policy (ONDCP) and the Drug Enforcement Administration (DEA) on measures to combat drug traffickers' use of cryptocurrency. The senators highlighted concerns about the growing role of cryptocurrency in facilitating the manufacturing, trafficking, and laundering of proceeds from fentanyl sales.

"The number of overdose deaths from opioids has dramatically increased in recent years, rising nearly four-fold from approximately 21,000 in 2010 to more than 81,800 deaths in 2022. This sharp increase is attributed to the rapid proliferation of illicitly produced fentanyl," wrote the senators.

Fentanyl, a synthetic opioid approved for treating severe pain, has been illegally manufactured and distributed through clandestine drug markets. These counterfeit tablets often resemble commonly misused prescription medicines or other illicit drugs. Overdose deaths involving fentanyl and its analogs increased by over 56% from 2019 to 2020, making it the leading cause of death for individuals aged 18-45 in the United States.

The senators noted that fentanyl production involves a global network requiring precursors—chemical substances used in illegal drug manufacture—that typically originate outside the U.S. The DEA has identified China as a leading producer of these precursors, which are then used by Mexican cartels to manufacture fentanyl sold in the U.S. Chinese financial firms also play a significant role in laundering funds for Mexican cartels.

"Cryptocurrency has played an increasingly prominent role in the global fentanyl trade over the past decade," continued the senators. In 2020, ONDCP under the Trump Administration recognized that crypto created "a favorable risk-reward structure that drug traffickers are now embracing." In September 2022, the Biden Administration announced new steps to strengthen anti-money laundering enforcement within the crypto ecosystem due to its facilitation of ransomware cybercriminals, narcotics sales, money laundering for drug trafficking organizations, and funding rogue regimes.

A Government Accountability Office (GAO) study found that crypto was central to rising drug sales in the U.S., specifically fentanyl and other synthetic opioids. Despite many transactions being recorded on public blockchains, illicit actors favor crypto due to its near-instantaneous cross-border capabilities and pseudonymous features. Decentralized exchanges pose additional challenges as they operate without traditional central entities or administrators.

A May 2023 investigation into Chinese companies supplying fentanyl precursors revealed that most accepted cryptocurrency payments. These companies' wallets received nearly $30 million in crypto payments—enough to produce $54 billion worth of fentanyl pills.

In response to this trend, federal agencies have taken various actions against using crypto in drug trafficking. In April 2023, Treasury sanctioned multiple individuals and businesses in China for supplying fentanyl precursors to Mexican cartels. In September 2023, several Sinaloa Cartel members were sanctioned for laundering proceeds through crypto wallets held by cartel leadership. By October 2023, DOJ indicted eight China-based companies involved with crimes related to fentanyl production and distribution.

The Department of Justice also announced a new counter-fentanyl strike force aimed at identifying disruption opportunities within international fentanyl trafficking networks reliant on cryptocurrency.

While acknowledging these efforts' impact, Senators Cassidy and Warren seek further information on ongoing measures against illicit use of crypto by drug traffickers. They have requested responses from ONDCP Director Rahul Gupta and DEA Administrator Anne Milgram by June 14, 2024.

___