US Treasury Imposes Sanctions on Several Chinese Crypto Wallets Linked to Illegal Drug Dealers

The US Department of Treasury has imposed sanctions on cryptocurrency wallets of China-based chemical companies and individuals tied to illegal production and trafficking of fentanyl.

The blocked wallets apparently “received millions of USD funds over hundreds of deposits,” Deputy Treasury Secretary Wally Adeyemo said during a press conference on Tuesday.

“We have identified and blocked over a dozen virtual currency wallets associated with these actors.”

Per the Office of Foreign Assets Control (OFAC), 19 crypto wallet addresses were involved in the action, which were added to the specially designed nationals (SDN) list. These wallets hold cryptocurrencies including Bitcoin (BTC), Ether (ETH), Tether (USDT) and Tron (TRX).

“If you benefit from the proceeds of this illicit activity, we are going to come after your assets,” Adeyemo added.

DOJ Announces Eight Accusations Against Chinese Chemical Companies

In addition to the sanctions the US Department of Justice (DOJ), unsealed eight indictments against China-based firms and employees in connection with the production and distribution of drugs – fentanyl and methamphetamine.

Justice Department Announces Eight Indictments Against China-Based Chemical Manufacturing Companies and Employeeshttps://t.co/f37okHaa6z

— U.S. Department of Justice (@TheJusticeDept) October 3, 2023

These China-based chemical companies “tend to use cryptocurrency transactions to conceal their identities and the location and movement of their funds,” DOJ wrote.

The US agency specified individuals – Qingsong Li and Chunhui Chen – both of whom “allegedly maintain cryptocurrency wallets for the remittance of payments of precursor chemicals.” Another Chinese national Wei Zhang, operates a cryptocurrency wallet that accepts payments for Hubei Guanlang Biotechnology Company on the sales of drugs including opioid additives.

According to Deputy Attorney General Lisa O. Monaco, dozens of agents, analysts, and prosecutors at the DOJ were involved in tracking down the perpetrators. “It also reflects teamwork from across the Federal government,” Lisa noted, adding that agents from the US FBI and IRS followed the blockchain to trace crypto transactions.

“Our agents and prosecutors combined old-school techniques like officers going undercover with cutting-edge tools like cryptocurrency tracing.”