Chainalysis, a blockchain analytics firm, has revealed direct financial connections between Mexican drug cartels and Chinese fentanyl precursor suppliers through cryptocurrency transactions. The analysis highlights how crypto has become interwoven into the illicit drug trade, citing a civil forfeiture in Wisconsin that led to the seizure of approximately $5.5 million in crypto tied to these transactions. Chinese manufacturers are identified as the primary source of fentanyl precursors for Mexican cartels, particularly the Sinaloa Cartel and Cartel Jalisco Nueva Generación, who use crypto and underground banking networks to circumvent capital controls on foreign currency purchases. The report found that cartel-affiliated networks employ basic crypto techniques to swiftly move funds through centralized exchanges and unhosted wallets. This operational pattern prioritizes speed over security, making their transactions more visible to investigators. Between 2018 and 2023, one suspected group received over $37.8 million in payments via crypto, indicating the scale of their operations and the critical role of blockchain technology in their illicit activities.

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