Convertible digital currencies used to purchase drugs

The White House has issued two warnings regarding drug purchases in the US, making specific references to the role of cryptocurrencies in such transactions.

The two addresses were sent to financial institutions and digital payment platforms. The warnings claim that “digital convertible currencies”, especially Bitcoin, Bitcoin Cash, Ethereum and Monero are used for illicit drug purchases on the dark web.

A concrete example is fentanyl, a chemical that is illegally introduced to the US through Mexico or China.

“An analysis of sensitive financial data indicates that illegal drug manufacturers, dealers and consumers use online payment platforms or convertible digital currencies to buy fully synthesized precursor or narcotic chemicals from China,”

is shown in one of the opinions.

OFAC is not for play

The US Treasury Department’s Office of Foreign Asset Control (OFAC) also sanctioned three Chinese citizens for violating money laundering and drug trafficking laws.

OFAC said that Xiaobing Yan, Fujing Zheng and Guanghua Zheng are drug dealers and have frozen any property they own in the US.

Blocked funds include a number of Bitcoin addresses, as well as a Litecoin address belonging to Chinese citizens.

Wednesday’s action marks the second time OFAC has blocked cryptocurrency addresses associated with drug trafficking. In December 2018, two Iranian citizens residing in the US were added to the sanctions list.