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White House Advisory: Virtual Currencies Used in Illicit Transactions Involving Controlled Substance Fentanyl

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The White House has warned that cryptocurrencies have been used to purchase highly dangerous controlled substances like Fentanyl.

The two advisories, addressed to digital payment providers and financial institutions, note that “convertible virtual currencies” such as Bitcoin (BTC), Bitcoin Cash (BCH), Ether (ETH), and Monero (XMR) have been used to buy illegal drugs through various black markets.

Cryptocurrencies Used to Pay for Highly Dangerous Controlled Substances

As mentioned in the advisory issued on Wednesday, convertible virtual currencies are defined as monies that can be easily liquidated into more widely accepted fiat currencies like the US dollar.

The advisory specifically stated that fentanyl, a Schedule II controlled substance that’s smuggled into the U.S. from China and Mexico, has been purchased using virtual currencies.

Fentanyl is 80 to 100 times more powerful than the highly addictive pain medication morphine, according to the US Drug Enforcement Agency (DEA).

As noted in the advisory:

“An analysis of sensitive financial data indicates that domestic illicit drug manufacturers, dealers, and consumers use online payment platforms or [convertible digital currency] to purchase precursor chemicals or completely synthesized narcotics primarily sourced from China.”

AlphaBay Dark Market Shut Down After Authorities Cracked Down On Illicit Transactions

The White House issued the warning along with other governments that are also focused on fighting the fentanyl epidemic. While investigating how the controlled substance is acquired, government agencies have found cryptocurrencies being used for buying and selling it.

The advisory pointed out that US authorities had previously shut down the AlphaBay dark market (in July 2017), which was also a case involving the use of virtual currencies to purchase illegal drugs.

The report also revealed the different methods used by US officials to detect and track down payments made for acquiring controlled substance using CVC’s like users’ IP addresses, crypto wallets, and transaction hashes.

On Wednesday, the US Treasury Department’s Office of Foreign Assets Control (OFAC) blacklisted three Chinese citizens and their crypto addresses, as they’ve been accused of engaging in various illicit activities such as money laundering and violating drug control laws.

In December 2018, South Korean police officials arrested nine individuals who had allegedly used digital currencies to sell narcotics, according to the Seoul Central District Prosecutor’s Office. The dealers reportedly used a crypto called “DarkCoin” to conduct transactions involving the sale and purchase of hashish, LSD, and MDM

The website through which the drugs were sold had 636 active members from March to November 2018 and around 50 illicit drug sales were made, according to the Korea Herald.

Sourced by Ethereum World News

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