Crypto’s dark role in the US opioid epidemic

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Crypto’s dark role in the US opioid epidemic:- The crypto industry is facing an uphill battle in the aftermath of last year’s market crash and the subsequent collapse of several prominent companies. With the need to convince skeptics of the valuable features cryptocurrencies offer, there is a pressing demand for mainstream adoption.

However, critics of crypto’s use have a strong arsenal of arguments, citing concerns such as its substantial carbon footprint, lack of basic consumer protection, support for corporate ransomware, and even the financing of North Korea’s nuclear weapons program.

Elliptic, a Blockchain Analytics

This week, another issue has emerged, further complicating the industry’s reputation. Elliptic, a blockchain analytics firm, published a study revealing a connection between cryptocurrencies and the spread of fentanyl, a powerful synthetic opioid responsible for the highest number of deaths among 18- to 45-year-olds in the United States.

Elliptic’s research indicates that the majority of fentanyl trafficked into the US is produced using chemical ingredients imported from Chinese suppliers, and an alarming 90 percent of these suppliers accept cryptocurrency payments.

Elliptic’s research Team

During their investigation, Elliptic’s research team received offers to supply large quantities of a specific chemical ingredient that is exclusively used to manufacture fentanyl. Additionally, a “menu” of chemicals provided to the team included ingredients for producing methamphetamine and amphetamine.

While it is challenging to gauge the exact role of crypto in facilitating such activities, the fact that a significant proportion of these suppliers accept cryptocurrency suggests a notable demand for using digital currencies to pay for these types of chemicals.

Tom Robinson, Elliptic’s chief scientist and co-founder, emphasized this point during a phone interview, stating, “It’s hard to say how important crypto is to this type of activity, but the fact that such a large proportion of these suppliers accept crypto suggests to me there is a significant demand to pay in crypto for these types of chemicals.”

American Succumbing

The fentanyl epidemic in the US is a crisis of immense proportions. This illicit drug has surpassed legally prescribed painkillers as the primary cause of overdose in the country, resulting in a death rate equivalent to one American succumbing to an overdose every five minutes. Alongside the devastating impact of Covid-19, the fentanyl epidemic has pushed down US life expectancy to 76.4 years, a low not seen in the past 25 years.

According to Elliptic’s findings, the cryptocurrency wallets used by these companies have received a staggering total of over $27 million, a sum sufficient to purchase ingredients capable of producing fentanyl pills with a street value of approximately $54 billion.

Cryptocurrency Can Purchase

Robinson further emphasized the severity of the situation, saying, “The issue here is that a relatively small amount of cryptocurrency can purchase enough chemicals to produce vast amounts of fentanyl, and we know that fentanyl is killing millions of people… so the impact that crypto is potentially having here is extreme.”

Furthermore, the number of payments sent to Chinese suppliers of fentanyl-related ingredients is skyrocketing. In January 2021, only one payment was made using cryptocurrency for these products. However, by the following month, the number had surged to over 600.

Crypto Supporters in Washington

While Robinson believes that crypto is an “inherently neutral technology” with the potential for both positive and negative applications, it undeniably adds another layer of complexity to America’s relationship with cryptocurrencies.

On one hand, market regulators, the Department of Justice, and the Treasury are actively combating illicit crypto activities through enforcement, criminal charges, and sanctions. On the other hand, there are numerous crypto supporters in Washington, including Republican legislators Tom Emmer, Cynthia Lummis, and Patrick McHenry, while some Democrats, such as Max.

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