The US Treasury discovered bitcoin addresses associated with Chinese drug dealers suspected of selling synthetic opioids in the United States.

On 21 August, the Treasury’s Office of Foreign Assets Control (OFAC) and Treasury’s Financial Crimes Enforcement Network (FinCEN) announced coordinated efforts to increase “to bring additional financial pressure upon those who manufacture, sell, or distribute synthetic opioids or their precursor chemicals.”

The US Treasury announced it has revealed Chinese kingpins who fueled America's deadly opioid crisis. OFAC identified three Chinese nationals as foreign narcotics traffickers (Fujing Zheng, Guanghua Zheng, Xiaobing Yan) and one Chinese entity, Qinsheng Pharmaceutical Co. Ltd., for being owned or controlled by Fujing Zheng.

Within the investigation, OFAC included 11 bitcoin addresses and one Litecoin address in the Specially Designated Nationals List (SDN).

“The Zheng DTO laundered its drug proceeds in part by using digital currency such as bitcoin, transmitted drug proceeds into and out of bank accounts in China and Hong Kong, and bypassed currency restrictions and reporting requirements... Both Zheng and Yan are known to use digital currency (bitcoin), and OFAC is also identifying bitcoin addresses associated with these two drug traffickers to maximize disruption of their financial dealings.”

Bitcoin and other digital currencies (Bitcoin Cash, Ethereum, or Monero) are also mentioned in the report of the Financial Crimes Enforcement Network (FinCEN) as one of four predominant funding mechanisms associated with fentanyl trafficking patterns.

Residents of the United States are now prohibited from dealing with these addresses.

“The Chinese kingpins that OFAC designated today run an international drug trafficking operation that manufactures and sells lethal narcotics, directly contributing to the crisis of opioid addiction, overdoses, and death in the United States.  Zheng and Yan have shipped hundreds of packages of synthetic opioids to the U.S., targeting customers through online advertising and sales, and using commercial mail carriers to smuggle their drugs into the United States,” said Sigal Mandelker, Under Secretary for Terrorism and Financial Intelligence.