Chinese Drug Kingpins Use Bitcoin, According to U.S. Treasury

The U.S. Department of the Treasury is targeting an international drug trafficking operation which manufactures and sells lethal narcotics. Fujing Zheng is one of the Chinese nationals currently under economic restrictions, who controls both the Zheng DTO narcotics racket and Qinsheng Pharmaceutical Co. Ltd. Xiaobing Yan is another major player in the criminal enterprise. Together, Zhang and Yan are being held responsible for shipping “hundreds of packages of synthetic opioids to the U.S.” Synthetic opioid use is currently at a crisis point in the U.S., killing tens of thousands every year. The multi-level operation is being sanctioned via the Foreign Narcotics Kingpin Designation Act.

Bitcoin Addresses to Be Blacklisted

Although the Financial Crimes Enforcement Network (FinCEN) will aggressively be alerting financial institutions of these criminal enterprises, it’s difficult because some of their operations are done in Bitcoin. For example, the U.S. Treasury is reporting that Zheng DTO was able to move funds into and out of China and Hong Kong via Bitcoin, thereby passing currency restrictions and reporting requirements. The U.S. Treasury will be marking Bitcoin addresses used by both Zheng and Yan, both of which are known to use the leading cryptocurrency frequently. It is unknown how much money has passed through these channels, or how large Zheng’s and Yan’s Bitcoin holdings are.

An Expansive Criminal Enterprise

The entire drug smuggling operation is said to cover some 37 U.S. states and 25 countries. Both Fujing Zheng and his father Guanghua Zheng were charged in a federal court in Cleveland, Ohio last year for operating a drug conspiracy. The racket produced and shipped “deadly fentanyl analogues, cathinones, and cannabinoids.” Authorities are struggling to keep up with criminal enterprises as more and more move towards using cryptocurrencies as a bridge for money laundering. Still, however, most of these rackets conduct business in cash. That has not stopped U.S. authorities from signaling out cryptocurrencies, however, especially privacy-oriented coins. How much of organized crime do you believe uses Bitcoin or other cryptocurrencies? Does it make up a large portion of their financial dealings? Let us know your thoughts in the comments below.  Buy and trade cryptocurrencies with a 100x multiplier on our partner exchange, StormGain.

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