US Treasury Department Issues a Warning About 4 Cryptocurrencies

The U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN) has issued a new advisory warning U.S. financial firms about the increasing use of cryptocurrencies in illicit drug trafficking.

This advice, which updates an advice previously published in 2019, claims that Bitcoin (BTC), Ethereum (ETH), Monero (XMR), and Tether (USDT) are involved in this illicit market.

According to FinCEN, criminal organizations in Mexico are increasingly using these digital assets to purchase the raw materials needed to produce a powerful drug. The cartels reportedly purchase precursor chemicals and production equipment from China-based suppliers and pay for these transactions with the aforementioned cryptocurrencies.

These payments usually arrive in Chinese suppliers’ wallets hosted by various cryptocurrency companies, sometimes routed through a secondary money transmitter. This network of criminal organizations involved in drug production has become a major concern for US authorities.

The recommendation follows several enforcement and criminal cases filed by US authorities against entities involved in such activities. In October, the U.S. Department of Justice charged eight companies with ties to China with the illegal drug production, distribution and sale of precursor chemicals.

The updated recommendation is a stark reminder of the challenges posed by the anonymous nature of cryptocurrencies and their potential use in illegal activities.

*This is not investment advice.