The U.S. Treasury’s OFAC imposes sanctions on entities involved in drug trafficking, highlighting the cryptocurrency connection in a report by Chainalysis.
The U.S. Treasury’s Office of Foreign Assets Control (OFAC) recently imposed sanctions targeting individuals and companies linked to the manufacturing and distribution of dangerous drugs, notably involving cryptocurrency addresses. A China-based drug trafficking network, with ties to a Canadian national and two Canadian businesses, faced these sanctions.
Chainalysis, a blockchain analytics firm, examined the cryptocurrency activity associated with these sanctions. Cryptocurrency addresses involved spanned Bitcoin, Ethereum, and Tron blockchains. Ethereum and Tron addresses mainly received stablecoins, such as USDT and USDC, reflecting the trend of using stablecoins for illicit transactions.
Except for addresses related to Valerian Labs, a Canadian company with a different profile, all were hosted on a mainstream exchange dubbed “Core Exchange.” Funds flowed in from personal wallets and other exchanges, primarily six.
The report suggests that these individuals received consistent amounts of cryptocurrency, indicating the sale of specific goods, such as fentanyl and precursor chemicals. Darknet market transactions also funneled substantial amounts into these addresses, suggesting possible resale of drugs or chemicals from these labs.
The intersection of cryptocurrency and illicit activities continues to draw regulatory attention.