Mexican drug cartels have been using major cryptocurrencies such as Bitcoin (BTC), Ethereum (ETH) and others to purchase key raw materials needed to manufacture the deadly synthetic opioid fentanyl, according to a new report by U.S. regulators.
According to the Financial Crimes Enforcement Network (FinCEN), drug cartels are using cryptocurrencies and a variety of other methods to buy chemicals, tablet presses, molds, and other manufacturing equipment to make fentanyl from Chinese companies.
FinCEN is the U.S. Treasury Department's agency that combats money laundering and terrorist financing.
In addition to BTC and ETH, Cartel reportedly also trades other crypto assets, including top stablecoin USDT and privacy coin Monero (XMR).
FinCEN said drug trafficking organizations would send the cryptocurrency to individuals with ties to Chinese suppliers or to secondary remittance agents whose wallets were hosted by virtual asset service providers.
But this isn't just about cryptocurrencies: US regulators have also noted that cartels rely on banks, money service companies (MSBs) and online payment processors to get the materials they need to make fentanyl.
Many of these transactions are settled in dollars through U.S. correspondent banks, domestic online payment processors, and agents based in Mexico and China for U.S. MSBs, according to FinCEN.
Drug cartels also use shell companies to appear as legitimate Chinese exporters and Mexican importers, regulators say.
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