The US Treasury Department's Financial Crimes Enforcement Network (FinCEN) has alerted US financial institutions about Mexican drug cartels increasingly using cryptocurrencies to buy chemicals for manufacturing fentanyl. In a June 20 advisory, FinCEN mentioned the use of Bitcoin, Ethereum, Monero, and USDT in these illegal transactions. Financial firms are urged to stay vigilant and report suspicious activities, as criminals are exploiting new technologies for illicit purposes.

FinCEN also pointed out that while cryptocurrency use in criminal activities presents challenges, it also offers new opportunities for law enforcement to detect and disrupt the fentanyl supply chain. The advisory noted a significant shift in payment methods used by Mexico-based criminal organizations, like the Sinaloa Cartel and CJNG, who are now purchasing fentanyl precursor chemicals from China using digital assets.

The advisory highlighted red flags such as small payments to chemical industries without legitimate reasons and the use of shell companies to hide transaction origins. Financial institutions are encouraged to incorporate procedures for detecting suspicious crypto transactions into their Anti-Money Laundering (AML) programs and to use blockchain analytics to trace transactions linked to PRC-based suppliers and Mexico-based TCOs. FinCEN also urged these institutions to share information through the FinCEN Exchange initiative.

This advisory is part of the US government's broader effort to combat the opioid crisis, which President Biden has declared a national emergency. Measures include sanctions on foreign drug traffickers and international regulatory collaborations. The urgency is underscored by the high number of fentanyl overdose deaths in the US, particularly among individuals aged 18 to 45. FinCEN's advisory aims to alert financial institutions to the complex networks involved in fentanyl production and distribution, emphasizing the need for vigilance and proactive measures against the misuse of cryptocurrencies in this lethal trade.