Among the fears that revolve around the use and exploitation of the cryptocurrencies and the crypto industry are the allegations of facilitating illegal activities. Most notable of these activities include money laundering, fraud and the drug trade.most of the dealings that accept cryptocurrencies happen on the darknet as they provide a certain level of anonymity that is ultimately favorable for the illegal nature of the dealings. The United States is the latest country, globally, to take note of this.
The White House issued a couple of advisories on drug purchases in the U.S. these were made on Wednesday, using the communications to make specific references and highlight explicitly, the role of cryptos in these dealings.
The advisories addressing both financial institutions and digital payment daises, state that “convertible virtual currencies,” mainly BTC, BCH, ETH and XMR, can be, have been used in the past and still do continue to be used for illicit substance purchases on the bright, deep, and darknets.
The advisory then goes ahead to offer its opinion as to what precisely these convertible currencies are. It defines convertible virtual currencies as monies that are easily liquidated into stable fiat currencies such as the dollar.
Even though a good number of drugs are traded on the darknet and in different amounts in terms of bulk, the advisory pinpoints a specific controlled substance that it says is being purchases online and shipped following payment made in cryptocurrency. Expressly distinguished is the drug fentanyl, a Schedule II controlled substance whose illegal cousin enters the U.S.A through Mexico or China, per the advisories.
reports coming from the Drug Enforcement Agency, DEA, indicate that fentanyl is 80 to 100 times stronger than morphine.
“An investigation into sensitive financial data shows that domestic illicit drug dealers, manufacturers, and consumers use digital payment platforms or convertible virtual currency to purchase precursor chemicals or entirely synthesized narcotics largely coming from China,” the advisory reads.
The White House made the financial advisory with other government agencies as a part of a larger cooperative effort “to finish the fentanyl predicament.” therefore, methods of payment were studied, including virtual currencies.
The takedown of dark market AlphaBay by U.S. officials in July 2017 is given as an example of past collaboration between virtual currencies and drug trafficking.
amalgamated in the report is methods of tracking and discovery payments for drugs using CVC’s for instance, wallet and IP addresses along with transaction hashes.
Today, the U.S.A Treasury Department’s Office of Foreign Assets Control (OFAC) moved to blacklist three Chinese nationals for money laundering and drug trafficking laws.