Crypto deposits to Chinese precursor makers surge 600% in 2023

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As a crypto investor with a keen interest in blockchain intelligence and the intersection of technology and illicit activities, I find the TRM Labs report on Chinese precursor manufacturers and their increasing use of cryptocurrencies for transactions quite intriguing. The sixfold increase in deposits linked to these entities from 2022 to 2023 is a clear indication that crypto is becoming a preferred payment method for this sector, especially given the anonymity and borderless nature of digital assets.

As a crypto investor, I’d interpret this news piece from TRM Labs differently: In the year 2023, Chinese precursor manufacturers raked in over $26 million worth of cryptocurrencies in their accounts. Approximately 60% of these transactions were settled using Bitcoin.

As a researcher studying the trends in payment methods for Chinese drug manufacturers, I’ve noticed an intriguing development: the use of cryptocurrency has significantly increased. According to TRM Labs, a reputable blockchain intelligence firm with backing from industry giants such as JPMorgan Chase, Visa, Citi, and PayPal, there was a sixfold increase in crypto deposits into wallets associated with these entities between 2022 and 2023.

As a researcher studying cryptocurrency trends, I came across an intriguing finding in a recent report published by TRM Labs and featured on crypto.news. In the initial four months of 2024, deposits into addresses associated with Chinese drug producers experienced a significant surge, nearly doubling the amount recorded during the same timeframe in 2023. The drug precursor networks in China received approximately $26 million throughout 2023, with around 11 manufacturers responsible for over 70% of all crypto-denominated sales.

As a crypto investor, I’ve noticed that most funds sent to Chinese precursor manufacturers for the production of mining equipment originate from unhosted wallets, cryptocurrency exchanges, and payment services. On the other hand, these manufacturers typically host their own wallets at popular cryptocurrency exchanges.

TRM Labs

Around 60% of the cryptocurrency payment transactions made to Chinese precursor manufacturers took place on the Bitcoin blockchain, according to the data. About 30% occurred on the TRON blockchain, while roughly 6% were processed through the Ethereum blockchain. Notably, these manufacturers have shown a readiness to receive payments in traditional currencies using services such as PayPal, MoneyGram, Western Union, and bank transfers, despite the increasing volume of crypto transactions.

Based on TRM Labs’ research findings, I discovered that Chinese drug precursor exports primarily focus on Canada, the Netherlands, Australia, Germany, and the United States as their leading destinations. Nevertheless, there are advertisements aiming at Russia and its neighboring countries for mephedrone precursors.

In April, a US congressional committee uncovered evidence that China’s government subsidizes the production of illicit fentanyl precursors by granting tax rebates to Chinese companies manufacturing these substances, as long as they export them rather than selling them domestically.

According to Elliptic, a well-known blockchain intelligence company, fentanyl has emerged as a preferred choice among drug traffickers due to its cost-effectiveness in production and extraordinary potency. This powerful opioid is approximately 50 times stronger than heroin, making it the leading cause of death for Americans aged between 18 and 45.

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2024-06-11 12:08