A recent report by blockchain analytics firm Elliptic has exposed a troubling connection between centralized crypto exchanges and the global fentanyl trade. The report, titled “Crypto and the Global Fentanyl Trade,” sheds light on over 4,000 transactions, totaling $32 million, used to purchase precursors to fentanyl, a potent and deadly opioid. These transactions were identified between 2017 and 2021 and originated from 120 countries, emphasizing the widespread nature of the issue.
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What’s even more alarming is that four centralized crypto exchanges facilitated a whopping 65% of these transactions, taking advantage of lax regulatory oversight in their respective countries. This regulatory gap enables anonymous purchases, making it challenging for authorities to trace and halt illegal activities.
The use of cryptocurrencies in illicit activities is not new, but its scale in the fentanyl trade raises serious concerns. Fentanyl’s potency and ease of production have made it a preferred choice for drug traffickers, leading to a surge in overdose deaths worldwide. The United Nations Office on Drugs and Crime estimates that fentanyl and its analogs caused over 36,000 deaths in the United States alone in 2019.
Elliptic’s research further reveals that Chinese chemical producers are accepting crypto as payment for fentanyl ingredients, enabling drug operations to mass-produce the narcotic worldwide. This trade is happening in full public view, not just on the dark web.
The report’s findings have significant implications for the crypto industry, emphasizing the need for greater transparency and accountability in crypto transactions. Centralized exchanges must implement stronger measures to prevent their platforms from being misused for illegal activities.
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To address this global issue, Elliptic calls for enhanced international cooperation and regulatory frameworks for crypto transactions. Stopping illegal crypto transactions requires a coordinated effort, advanced tracing tools, and united actions from countries worldwide.
The dark side of crypto must be addressed urgently to protect communities from the deadly consequences of the fentanyl trade.
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Written by Agbo Obinnaya
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