New DEA Report Covers Bitcoin Money Laundering and Darknet Drug Trade
The United States Drug Enforcement Administration (DEA) and the United States Department of Justice recently jointly released their National Drug Threat Assessment for this year. In the new report, the DEA mentions the use of bitcoin and other cryptocurrencies for money laundering, as well as drug trafficking through darknet markets. The DEA’s Strategic Intelligence Section creates a new drug threat assessment each year. The annual report is prepared using data gathered from over five thousand state and local law enforcement agencies across the United States.
“Emerging as a money laundering threat, virtual currencies, such as Bitcoin, enable TCOs [Transnational Criminal Organizations] to easily transfer illicit proceeds internationally,” the report notes in a passage on illegal finance. Chinese manufacturers who produce products used in trade-based money laundering scams are said to now prefer using Bitcoin. Later in the report, Over The Counter Bitcoin brokers are accused of helping to enable these international transactions. “The increasing use of OTC bitcoin brokers, who are capable of transferring millions of dollars in bitcoin across international borders, as part of a capital flight scheme is expected to continue to intertwine criminal money laundering networks with capital flight,” the report states.
This year’s National Drug Threat Assessment contains an extensive section on fentanyl and other synthetic opioids. Aside from fentanyl analogs, U-47700 is discussed. “The rise of fentanyl paved the way for other synthetic opioids to enter illicit drug markets. In 2016, DEA first encountered U-47700, a synthetic opioid responsible for at least 80 deaths in the United States for the year. It is approximately 7.5 times the potency of morphine, and is abused for its strong opioid properties. U-47700 primarily arrives in the mail from China, and has been seized in powder and tablet form,” the report states. The DEA used its temporary emergency scheduling powers to temporarily place U-47700 under Schedule I of the Controlled Substances Act in October of last year. Despite the relatively small number of deaths associated with the research chemical, the DEA claimed that U-47700 “posed an imminent hazard to public safety.” The substance received significant attention from law enforcement and the media after the musician formerly known as Prince fatally overdosed on a combination of U-47700 and a fentanyl analog.
The new National Drug Threat assessment goes on to mention that last year law enforcement agencies began to discover fentanyl being sold in new forms, “such as on blotter paper, in eye droppers, and in nasal sprays.” The report goes on to state that the most illicit fentanyl is distributed in powder form and in pill form. Counterfeit pills are mentioned in the report. “New and novel preparations of illicit fentanyl are commonly found on darknet markets,” the report continues.
The DEA said in their report that their Diversion Control Division’s Regulatory Section reported no legally produced carfentanil had been reported as being diverted to the black market. The DEA concludes that all carfentanil seized within the United States originated from foreign producers who likely sold the product on darknet markets. The DEA expects that the market for new fentanyl analogs and other new opioids will continue to expand. They believe that drug traffickers will continue to experiment with producing and selling unscheduled opioid compounds. Blame is placed on darknet markets for providing access to new and untested fentanyl analogs.
It should be noted that fentanyl analogs that were produced in China and brought into the United States have existed since at least the mid-1970s, long before the existence of the darknet and darknet markets. An early example of such Chinese manufactured fentanyl analogs which were sold in the United States is a form of fentanyl analog which was mixed with heroin and sold as Chinese Rocks. New York City punk rockers Johnny Thunders and the Heartbreakers and the Ramones immortalized the fentanyl analog being sold in New York City during the mid-70s in a song titled Chinese Rocks. The darknet is also discussed in a section of the new National Drug Threat Assessment on New Psychoactive Substances, commonly referred to as research chemicals. According to the report, synthetic cannabinoids remain the most popular research chemicals traded and used in the United States. Stimulants such as cathinone analogs are said to be the second most popular research chemical being traded and used in the United States.