The Financial Crimes Enforcement Network (FinCEN), an arm of the U.S. Treasury Department, has issued an urgent warning to domestic financial firms, noting that Mexican drug cartels are increasing their use of cryptocurrencies to purchase chemicals used to make fentanyl.
In a June 20 announcement, the U.S. Financial Crimes Enforcement Network (FinCEN) specifically reminded the public that cryptocurrencies such as Bitcoin (BTC), Ethereum (ETH), Monero (XMR) and Tether (USDT) are increasingly being used for illegal transactions.
FinCEN emphasized that in the face of criminals' increasingly sophisticated use of new technologies to conduct illegal activities, financial institutions must be vigilant and actively identify and report any suspicious transactions. At the same time, the agency also believes that the use of cryptocurrencies in illegal financial activities, although it brings new challenges, also provides new investigative opportunities for law enforcement agencies.
According to FinCEN: “While cryptocurrency transactions present unique challenges, they also provide new opportunities to detect and disrupt the fentanyl supply chain.” This shows that despite the difficulties, advances in regulators and technology are also opening up new paths to combat this type of criminal activity.
Illegal transactions in the form of cryptocurrency
The U.S. Financial Crimes Enforcement Network (FinCEN) pointed out in its latest advisory that some major transnational criminal organizations (TCOs) in Mexico, such as the Sinaloa Cartel and the Jalisco New Generation Cartel (CJNG), are changing their means of payment. These organizations are now increasingly using cryptocurrencies to conduct transactions, a trend that suggests they are using the characteristics of cryptocurrencies to hide illicit financial flows, thus posing new challenges to law enforcement and supervision.
According to FinCEN, these Mexican criminal organizations are now frequently using digital assets to purchase precursor chemicals and equipment used to manufacture fentanyl from Chinese suppliers. These transactions often result in funds flowing to wallets held by Chinese suppliers and managed by cryptocurrency companies, sometimes involving secondary remittance institutions.
FinCEN has identified several red flags associated with the illicit use of cryptocurrency in the fentanyl supply chain, including small payments of unknown value sent to chemical and pharmaceutical industries in China, Hong Kong, or elsewhere, and the use of multiple shell companies to obscure the true source and destination of transactions.
To combat this, FinCEN is urging financial institutions to incorporate procedures for monitoring suspicious cryptocurrency transactions into their anti-money laundering (AML) programs. This involves using blockchain analysis techniques to track and link virtual currency addresses associated with Chinese suppliers and Mexican TCOs.
In addition, FinCEN recommends that financial institutions share information through its public-private partnership program, FinCEN Exchange, to improve the ability to detect, discover, and report illegal activities related to the fentanyl supply chain. This measure is intended to strengthen collaboration between the financial industry and law enforcement agencies to jointly combat illegal financial activities involving fentanyl.
America's Opioid Crisis
The U.S. government issued this warning as part of its comprehensive response to the opioid crisis. At the same time, President Biden has characterized the opioid crisis as a national emergency, and the government has implemented a wide range of measures to cut off the supply chain of illegal fentanyl. This includes sanctions on foreign individuals or organizations suspected of being involved in drug trafficking, and working with international partners to strengthen regulatory and law enforcement actions.
According to the U.S. Drug Enforcement Administration (DEA), fentanyl overdose has reached alarming proportions in the United States and has become the leading cause of death among people aged 18 to 45. Fentanyl, a synthetic opioid, is 100 times more potent than morphine, further highlighting the urgency of taking these measures.
The latest warning from the Financial Crimes Enforcement Network (FinCEN) is intended to alert U.S. financial institutions to the sophisticated criminal networks involved in the production and distribution of fentanyl. At the same time, FinCEN issued a warning and emphasized that financial institutions need to be vigilant and take proactive measures to combat the abuse of cryptocurrencies in such deadly transactions. Through these efforts, the U.S. government hopes to more effectively combat the opioid abuse crisis and protect public health and safety. #FinCEN #加密货币 #非法活动
Conclusion
The warning from the U.S. Financial Crimes Enforcement Network (FinCEN) reveals new trends in cryptocurrency in criminal activities, and also highlights the challenges and opportunities for law enforcement agencies to adapt and use technological advances to combat financial crime. As the illegal use of cryptocurrency increases, FinCEN urges financial institutions to be more vigilant, actively identify and report suspicious transactions, and improve their investigative capabilities through technical means such as blockchain analysis.
This action reflects that in the context of globalization and digitalization, combating criminal activities requires close cooperation between regulators, financial institutions and technology providers. This move aims to more effectively protect the integrity of the financial system, ensure the health and safety of the public, and promote the legal and healthy development of the cryptocurrency field through joint efforts.
