The US Treasury Department’s Financial Crimes Enforcement Network (FinCEN) has recently issued a warning regarding the use of four specific cryptocurrencies in illicit drug trafficking. This advisory serves as an update to a previous warning issued in 2019 and focuses on Bitcoin (BTC), Ethereum (ETH), Monero (XMR), and Tether (USDT).
According to FinCEN, criminal organizations in Mexico have been increasingly utilizing these digital assets to acquire the necessary materials for producing potent drugs. These cartels reportedly purchase precursor chemicals and production equipment from suppliers based in China, using the aforementioned cryptocurrencies as payment.
Payments made by these criminal organizations often end up in the wallets of Chinese suppliers, which are hosted by various cryptocurrency companies and sometimes routed through secondary money transmitters. The involvement of these criminal networks in drug production has become a major concern for US authorities.
This recommendation from FinCEN comes in the wake of numerous enforcement actions and criminal cases filed by US authorities against entities involved in similar activities. In fact, just last October, the US Department of Justice charged eight companies with ties to China for their involvement in the illegal production, distribution, and sale of precursor chemicals.
This updated advisory serves as a clear reminder of the challenges posed by the anonymous nature of cryptocurrencies and their potential for use in illegal activities.
Please note that this article does not constitute investment advice.