The US Treasury Department’s Financial Crimes Enforcement Network (FinCEN) has issued a stark warning to US financial firms, cautioning them about the increasing use of cryptocurrencies by Mexican drug cartels to purchase chemicals used in the manufacturing of fentanyl.
In an updated advisory released on June 20, FinCEN specifically pointed to the use of Bitcoin (BTC), Ethereum (ETH), Monero (XMR), and USDT, among other tokens, in these illegal transactions. The advisory highlighted a significant shift in the payment methods used by Mexico-based transnational criminal organizations (TCOs), such as the Sinaloa Cartel and the Jalisco New Generation Cartel (CJNG).
According to FinCEN, criminal organizations in Mexico are increasingly buying fentanyl precursor chemicals and manufacturing equipment from suppliers in China, with payments often conducted through digital assets. The advisory identified several warning signs associated with the illicit use of cryptocurrencies in the fentanyl supply chain.
Financial institutions are urged to incorporate procedures for detecting suspicious crypto transactions into their Anti-Money Laundering (AML) programs and encouraged to share information through the FinCEN Exchange initiative to enhance the detection and reporting of illicit activities related to the fentanyl supply chain.
The issuance of the advisory is part of the US government’s comprehensive approach to combating the opioid crisis, which President Biden has declared a national emergency. Fentanyl has become the leading cause of death for individuals aged 18 to 45 in the US, with the synthetic opioid being 100 times more potent than morphine, according to the Drug Enforcement Administration (DEA).
The updated FinCEN advisory aims to alert US financial institutions to the complex network of criminal organizations involved in the production and distribution of fentanyl and emphasizes the need for heightened vigilance and proactive measures to combat the misuse of cryptocurrencies in this deadly trade.
