Senator Elizabeth Warren said during a May 31 Senate hearing that she aims to combat cryptocurrency’s role in the illegal fentanyl trade.
Fentanyl trade
Warren said to the Senate Banking Committee:
“Crypto is supposedly banned in China … but more than 90 companies based in China are raking in tens of millions of dollars worth of crypto by selling these fentanyl precursors.”
Warren specifically cited data published by the blockchain firm Elliptic on May 23 . Based on that data, she noted that crypto transactions related to the fentanyl trade increased by 450% over the course of 2022.
In addition, Warren noted that enough cryptocurrency was spent on fentanyl precursors to produce $54 billion worth of the drug in 2022.
Warren said that, in response to the latest findings, she and Senator Roger Marshall will reintroduce their Digital Asset Anti-Money Laundering Act.
That bill aims to close loopholes that allow participants in the drug trade to make use of cryptocurrency. It was first advanced in late 2022 .
Rosenberg responds
Warren noted that the U.S. Treasury has taken action against the fentanyl trade. In fact, the agency sanctioned various parties that enabled fentanyl production on May 30 .
Warren asked Elizabeth Rosenberg, the Treasury’s Assistant Secretary for Terrorist Financing and Financial Crimes, whether the Treasury found that participants in the fentanyl trade rely on cryptocurrency. Rosenberg responded in the affirmative.
Rosenberg noted fentanyl traders use crypto due to its pseudonymous privacy model, its capacity for large international transactions, and its lack of customer scrutiny.
Rosenberg also agreed that Warren’s proposed anti-money laundering act would be beneficial. She said: “Yes, I’m certain that will help.”
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