At Hearing, Warren, DEA Official Confirm Crypto's Role in Fueling Illegal Fentanyl Trade

Hearing

"Senator Elizabeth Warren: So fentanyl killed more than 78,000 Americans last year, including more than 2300 people in Massachusetts. And crypto helps fund that death toll.

Crypto plays a role at every stage in the illicit fentanyl trade. Chinese companies sell the chemical ingredients used to make fentanyl to drug cartels and they get paid in crypto. The drug cartels and the traffickers sell their deadly drugs in the darkest marketplaces, and they get paid in crypto to the tune of about one and a half billion dollars in 2022. And drug kingpins buy weapons and cars and make payoffs, again, using crypto.

Now the Trump administration's DEA spotted this problem five years ago. In their 2018 threat assessment they said that cryptocurrencies "offer traffickers a relatively secure method for moving illicit proceeds around the world with much less risk compared to traditional methods." And since then, the problem has only gotten worse.

Take one case. Last year, the Department of Justice indicted a Sinaloa cartel member who laundered nearly $900,000 in crypto by directing their US-based drug couriers to deposit cash straight into the cartel's crypto accounts. And what did they then turn around and use that crypto for? They reinvested in the cartel's fentanyl factory, so that they could pump more fentanyl into the United States.

Mr. Yoes, Thank you for your work, and for the work of hundreds of thousands of police officers in the United States who are on the frontlines in the opioid crisis. You've seen the various tricks that drug traffickers use to move their drug money around. So if I can, let me ask you, why do you think cartel members find crypto such an attractive option?"

BREAK IN TRANSCRIPT

Senator Warren: All right, so, Mr. Urben, you have decades of experience at DEA following illicit fentanyl funds. Why do you think crypto has become so attractive?

BREAK IN TRANSCRIPT

Senator Warren: So you can move it fast.

BREAK IN TRANSCRIPT

Senator Warren: Unlike cash, which you've actually got to physically carry.

BREAK IN TRANSCRIPT

Senator Warren: It's just a lot easier to hide it, is that basically what you're saying here?

BREAK IN TRANSCRIPT

Senator Warren: Yeah, So, you know, make no mistake. Drug traffickers, they're also still moving cash the old fashioned way. But crypto has changed the game by allowing criminals to move boatloads of money instantaneously and nearly anonymously. You know, no need to try to stuff $900,000 in cold hard cash into a suitcase and worry about whether some customs agent will spot it. Now, cartel members can move as much money as they want using a handful of crypto wallets.

Holes in our anti-money laundering laws have given drug dealers a back door to move their dirty fentanyl money around. And that back door is wide open, and it's helping fuel the opioid crisis at home.

Mr. Yoes, if cartels and drug dealers and Chinese chemical companies can keep exploiting the holes in our anti-money laundering rules and keep funding the fentanyl business with crypto, what's that going to mean both for law enforcement and for families across this country?

BREAK IN TRANSCRIPT

Senator Warren: They will.

BREAK IN TRANSCRIPT

Senator Warren: Well, it is about closing the doors and that's why 20 senators, including seven right here on the Banking Committee, are working to pass the Digital Asset Anti-Money Laundering Act that closes these loopholes in our money laundering rules.

Crypto shouldn't get a free pass and I look forward to working with all of my colleagues to finally fix that. Thank you all.

BREAK IN TRANSCRIPT

Source