Law enforcement around the world has long pointed to China as being a source of deadly fentanyl as well as the precursors used to manufacture it. New research from both Chainalysis and Elliptic have put a number on how much of this trade is done in crypto.
Elliptic, which published its report on the topic Tuesday, says cryptocurrency wallets attached to darknet merchants which sell fentanyl as well as precursors have received $27 million in payments (though over exactly what time frame is unclear), while Chainalysis pegged the number at $37.8 million since 2018.
$27 million would purchase enough precursor to produce fentanyl pills with a street value of roughly $54 billion, Elliptic said in its report.
The majority of these transactions, according to the reports, use USDT or bitcoin – as opposed to privacy coins – making them relatively easy to track on-chain.
Over 90 China-based companies were identified by Elliptic researchers as willing to supply fentanyl precursors, and 90% of them accepted cryptocurrency payments.
Darknet markets ban the outright sale of fentanyl and it's been illegal to sell in China since 2019, but merchants get around this by using coded language. Meanwhile, the fentanyl precursors aren’t regulated in China and there are legitimate uses for them.
The researchers also noted that India is a growing supplier of precursors.
Both Chainalysis and Elliptic say they are working with law enforcement to identify and interdict the flow of funds in the fentanyl trade.
Fentanyl overdoses are now the leading cause of death for those aged 18-45 in the United States.