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Cryptocurrency Conundrum: Digital Currencies Fuel Fentanyl Trade in China, Warns Senator

This week, Senator Elizabeth Warren amplified her call for more comprehensive regulation of the burgeoning cryptocurrency market. This appeal was prompted by recent evidence suggesting that digital currencies are being exploited to support the fentanyl trade in China.

During a Senate Banking Committee hearing on Wednesday, Senator Warren highlighted the prevalence of cryptocurrency among Chinese entities involved in the production and sale of fentanyl. This claim was substantiated by data from a recent study conducted by blockchain analytics firm Elliptic.

According to Elliptic’s analysis, an astonishing 90% of Chinese companies engaged in supplying fentanyl accept payment via cryptocurrency. These businesses have already amassed $27 million in payments into their crypto wallets.

When extrapolated, this amount could potentially finance the production of fentanyl pills with a street value of up to $54 billion. Elliptic’s study grimly translates this into a potential supply of fentanyl sufficient to kill nearly 9 billion individuals.

“This level of fentanyl, funded entirely by cryptocurrency, is a chilling reality we must face,” warns Senator Warren.

This call for increased oversight coincides with the ongoing opioid crisis plaguing the US, where a surge in overdose fatalities reached new heights in 2022, as reported by the Center for Disease Control. Fentanyl, a synthetic opioid that’s up to 100 times more potent than morphine and 50 times more powerful than heroin, is suspected to be the driving factor in a majority of these overdoses, accounting for most of the drug-related deaths in 2021.

As a long-standing critic of the crypto industry, Senator Warren has consistently advocated for more stringent regulation of digital currencies. This urgency is fueled by the escalating role of cryptocurrencies in unlawful activities. The volume of illicit transactions involving cryptocurrencies soared to a record high of $20.1 billion last year, as revealed by Chainalysis, another blockchain analytics firm.