Drug cartels in Mexico have been found to be using various cryptocurrencies, including Bitcoin (BTC) and Ethereum (ETH), to purchase the necessary ingredients for producing the dangerous synthetic opioid fentanyl. This information comes from a recent report released by the Financial Crimes Enforcement Network (FinCEN), a regulatory agency operating under the US Department of the Treasury that focuses on combating money laundering and terrorism financing.

According to FinCEN, these cartels are using cryptocurrencies to buy precursor chemicals for fentanyl, as well as pill presses, die molds, and other manufacturing equipment from Chinese companies. They employ various methods, including crypto, to complete these transactions. In addition to BTC and ETH, these organizations are also known to engage in transactions involving the stablecoin USDT and the privacy coin Monero (XMR), among other crypto assets.

To complete these transactions, the drug-smuggling organizations send cryptocurrency to individuals associated with Chinese suppliers or to secondary money transmitters who hold wallets at virtual asset service providers. However, cryptocurrencies are not the only means used by these cartels. FinCEN reveals that they also rely on banks, money services businesses (MSBs), and online payment processors to acquire the materials necessary for producing fentanyl.

Many of these transactions are processed in US dollars through US correspondent banks, domestic online payment processors, and agents of American MSBs based in Mexico and China, according to FinCEN. The regulator also states that the drug cartels employ shell companies that mimic legitimate Chinese exporters and Mexican importers.

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