Us sanctions Chinese firms involved in fentanyl trade

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Us sanctions Chinese firms involved in fentanyl trade

On Monday, U.S. authorities took action against a number of China-based companies and individuals involved in the fentanyl trade.

The Department of Justice has unsealed eight indictments on crimes related to the production of fentanyl and methamphetamine, the distribution of synthetic opioids, and sales related to precursor chemicals.

While participants used various payment methods, the DOJ said that those involved in the crimes incorporated cryptocurrency into their cash flows. Crypto transactions allowed them to hide their identity and obscure money trails, the report said.

The agency said that two individuals linked with Hebei Shenghao Import and Export Company - Qingsong Li and Chunhui Chen - held crypto wallets for remittances related to precursor chemicals used in drug production.

The DOJ said that Wei Zhang, another individual, acted in connection with Hubei Guanlang Biotechnology Company. He is alleged to have run a cryptocurrency wallet that facilitated transactions for sales of fentanyl precursors and opioid additives.

The Treasury's office of foreign assets control imposed penalties on various parties responsible for drug transactions, including the U.S. government's Office of Foreign Assets Control.

The sanctions list restricts a total of 19 cryptocurrency addresses, including wallets holding Bitcoin, Ethereum, Tether, and Tron.

Although the Treasury's sanctions target 28 firms and individuals, the majority of the addresses belong to just five individuals, who are in turn connected to companies involved in the fentanyl and drug trade. Four of those crypto addresses also belong to a Vancouver, Canada-based company, Valerian Labs.

The administration also imposed sanctions on Du Changgen, who was identified as the leader of the criminal drug syndicate. The ECB said that Changgen has personally received cryptocurrency, but did not include any cryptocurrency addresses belonging to Changgen in the sanctions list.

The use of cryptocurrency in the fentanyl trade has been met with various recent advancements. The DOJ said that it took other steps against Chinese fentanyl companies in June, and some of those companies also utilized crypto payments.

The blockchain analysis firm Elliptic highlighted the problem in May 2023, prompting the U.S. to recognize it as a significant problem. Elizabeth Warren, speaking on condition of anonymity, is to call for action later this month on the issue.