The blockchain-based risk management and regulatory compliance assessment specialist indicates that the majority of Chinese pharmaceutical chemical suppliers accept crypto-based payment. The vast majority of companies contacted expressed willingness to dispatch fentanyl ingredients for which their international clients would pay in cryptocurrencies.

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An Investigative Study Connects Crypto Wallets to Chinese Pharmaceutical Distributors

The majority of chemical suppliers with accounts in three exchanges outside of China were identified by the Elliptic investigation. The report, however, was noncommittal regarding the specific identities.

By identifying hundreds of wallets that have received over $27 million in cryptos, the analytics firm confirmed that China-based pharmaceutical suppliers have notified the exchanges they use.

According to the report by Elliptic, Fentanyl is a cheap-to-manufacture synthetic opioid that is significantly more potent than typical heroin. Authorities have linked the drug to thousands of annual overdose-related fatalities in the United States.

Statistics published by the National Institutes of Health linked synthetic opioids to 70,600 overdose-related deaths in 2021, as compared to the 106,00 reported in the United States. The report identified Fentanyl abuse as the leading cause of deaths among Americans between the ages of 18 and 45.

Bitcoin and USDT Found to Facilitate Chinese Supplier Payments

The blockchain-based analysis revealed that more than 80 Chinese companies favored crypto-based payment for the shipment of fentanyl precursors.

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Elliptic observed that a prominent supplier to customers in Mexico cited cryptocurrency as the preferred method of payment. The anonymous vendor determined that stablecoin Tether (USDT) and Bitcoin were regarded as standard payment methods.

Elliptic's investigation team found that the majority of suppliers refused to export fentanyl precursors to the United States. Instead, China's preferred shipping destination was Mexico. The cartels would then export the drugs to the United States.

Elliptic Results Validate Trump Administration Discovery

The analytics firm was astounded to learn that Chinese companies relied on the cryptocurrency exchange for payments. The discovery undermines the 2019 implementation of China's prohibitive policies. Elliptic questioned the sincerity of China's decision to restrict access to international exchanges in light of the country's crypto-related repression.

The elliptic revelation parallels the findings of previous White House investigations. Specifically, the White House had detailed in 2019 how Bitcoin and Ethereum facilitate fentanyl trafficking payments.

The two leading cryptocurrencies were used alongside Monero. Elliptic is a privacy-centric cryptocurrency that is favored in dark web-based markets.

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Elliptic's disclosure corroborates the Trump administration's conclusion that fentanyl trafficking parties have adopted cryptocurrencies as their primary method of payment.