Senators Press Biden Admin About Role of Cryptocurrency in Fentanyl Trafficking

Sens. Elizabeth Warren (D-Mass.) and Bill Cassidy (R-La.) are taking a new look at efforts by President Joe Biden’s administration to curb fentanyl trafficking in the United States, particularly through online sales using cryptocurrency.

The bipartisan pair sent a letter on Wednesday to U.S. Drug Enforcement Administration Administrator Anne Melissa Milgram, and White House Office of National Drug Control Policy (ONDCP) Director Rahul Gupta, expressing their concerns about the role cryptocurrencies play in the online narcotics trade and seeking an update from the Biden administration on its efforts to crack down on such online transactions.

“Cryptocurrency has played an increasingly prominent role in the global fentanyl trade over the past decade, both in terms of facilitating the manufacturing and trafficking of fentanyl and in laundering drug cartels’ criminal proceeds, and has been recognized as a threat by administrations of both parties,” the two senators wrote.

The White House Office of National Drug Control Policy under President Donald Trump wrote, in a February 2020 strategy assessment, that “the combination of low production cost, the anonymity of the dark web and cryptocurrencies, and drugs with higher potency than their plant-based counterparts creates a favorable risk-reward structure that drug traffickers are now embracing to an even greater degree than ever before.” Separately, the Biden administration announced new anti-money laundering enforcement efforts in September 2022, intended to counter cryptocurrency markets that “have facilitated the rise of ransomware cybercriminals; narcotics sales and money laundering for drug trafficking organizations; and the funding of activities of rogue regimes.”

While some cryptocurrency transactions are cataloged using blockchain technology, Ms. Warren and Mr. Cassidy said cryptocurrency exchanges, and in particular so-called “decentralized” crypto exchanges without a singular administrator, offer an attractive venue for illicit narcotics transactions because they can be nearly instantaneous, conducted across borders, and done using assumed identities.

“A May 2023 investigation into 90 China-based companies that supply fentanyl precursors found that 90 percent accepted cryptocurrency payments,” the two Senators wrote, citing a report by the blockchain research firm Elliptic. “The same investigation found that cryptocurrency wallets used by these companies collectively received nearly $30 million in crypto payments—enough to purchase the necessary precursors to produce a staggering $54 billion worth of fentanyl pills.”

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The bipartisan duo credited the Biden administration with efforts to stop narcotics trafficking, including a series of indictments in October against eight China-based chemical companies accused of illegally distributing chemical precursors for fentanyl and other narcotics. A U.S. Department of Justice press statement announcing the indictments alleged several of the entities involved operated cryptocurrency wallets to make these alleged illicit transactions.

“While these developments are welcome, we seek additional information about the steps your offices are taking to disrupt illicit drug actors’ use of crypto,” Ms. Warren and Mr. Cassidy wrote on Wednesday.

The two senators asked the ONDCP and the DEA to assess cryptocurrency’s continued role in illegal narcotics transactions, describe their efforts to counter cryptocurrency’s role in such transactions, and explain their challenges and limitations. They requested a response by June 14.

NTD News reached out to the White House and the DEA for comment on this letter and their specific efforts to counter the role cryptocurrency may play in illegal narcotics transactions. Neither office responded by press time.

As the U.S. Department of Justice announced the fentanyl-trafficking indictments against the eight China-based chemical companies in October, Ms. Milgram assessed that “nearly all fentanyl precursors come from China.”

The Biden administration launched a U.S.-China Bilateral Counternarcotics Working Group in January to improve cooperation between the two countries in efforts to stop the flow of Chinese fentanyl and fentanyl precursors into the United States.

The House Select Committee on the Chinese Communist Party held a hearing last month to address the apparent flow of narcotics and chemical precursors from China into the United States. It was during that hearing that ranking member Rep. Raja Krishnamoorthi (D-Ill.) pointed to China’s comparatively low numbers of fentanyl deaths as a sign that the Chinese government knows how to address the problem domestically but enables the potent opioid to keep flowing outside its borders.

Original News Source Link – Epoch Times

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