The Treasury Department’s Office of Foreign Assets Control (OFAC) took actions against three Chinese nationals, who it alleges manufactured and distributed "synthetic opioids or their precursor chemicals." According to OFAC, the individuals laundered part of their drug proceeds in bitcoin, transmitting these proceed in and out of banks in China and Hong Kong. As a result of its investigation, OFAC has also identified a handful of bitcoin and litecoin wallet addresses associated with these individuals, which it has added to its sanctions list.
“The Chinese kingpins that OFAC designated today run an international drug trafficking operation that manufactures and sells lethal narcotics, directly contributing to the crisis of opioid addiction, overdoses, and death in the United States. Zheng and Yan have shipped hundreds of packages of synthetic opioids to the U.S., targeting customers through online advertising and sales, and using commercial mail carriers to smuggle their drugs into the United States,” said Sigal Mandelker, Under Secretary for Terrorism and Financial Intelligence.
OFAC's actions mark the second time the department has added cryptocurrency addresses to its sanctions list. In November 2018, the department blacklisted two bitcoin addresses associated with an Iranian ransomware scheme.
"We anticipate further action by OFAC to include additional cryptocurrency addresses attributed to these individuals and others that are involved in narcotics trafficking going forward," Chainalysis global head of policy Jesse Spiro told The Block.