Fentanyl sales are slowing down following US crackdown, says TRM Labs
Quick Take
- Wallets of known fentanyl vendors received half as much crypto in October than they did in January, TRM Labs said.
- The illegal drugs industry is still growing, but more slowly than it has done over the past four years.
- The firm attributes the slowing down to the OFAC sanctions and DOJ indictments over the past year.
Darknet drug dealers selling fentanyl, the powerful opioid leading to heavy addiction and overdoses, have seen their incomes decline recently, blockchain analytics firm TRM Labs said in a press release on Wednesday.
TRM Labs, which has been tracking over 100 known vendors for fentanyl and its precursors, noticed that inflows of crypto to addresses associated with such vendors slowed down over the course of 2023. In January, those vendors received close to $2 million in crypto to their addresses, then the number decreased in May to around $1.2 million, spiked to over $2.5 million in August but then dropped below $1 million on October, according to TRM.
The illegal business is still growing in the year-to-year terms, but the pace of that growth decreased. Since 2019, fentanyl-related money flows tracked by TRM have been growing on average 155% a year, but the growth in 2023 has been only 60% so far, the firm said.
The reason might be the crackdown on the fentanyl vendors by the U.S. government, TRM believes. In 2023, the U.S. Treasury’s Office of Foreign Assets Control (OFAC) put 82 people on the sanctions list for involvement in fentanyl trade, which is significantly more than in 2022 (17 people), 2021 (15 individuals), 2020 (seven) and 2019 (five), the firm said.
The lates sanctions include those against a network of Chinese manufacturers of fentanyl and its precursors and against the Mexico-based Sinaloa cartel. As a result, the cartel reportedly prohibited the production and trafficking of illegal opioids on the territory under its control. The Department of Justice also was able to seize large amounts of fentanyl precursors mailed to the U.S. from China in October.
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