Crypto deposits to Chinese precursor makers surge 600% in 2023

Blockchain intel firm TRM Labs said that China-based leading manufacturers received over $26 million in cryptocurrencies in 2023, and approximately 60% of payments were made with Bitcoin.

Cryptocurrency is becoming the payment of choice for Chinese drugmakers, as the amount of cryptocurrency deposited into wallets linked to these organizations increased sixfold from 2022 to 2023, according to TRM Labs, a blockchain intelligence firm backed by JPMorgan Chase, Visa and Citi. seems to be becoming the method and PayPal among others.

In a recent research report shared with Crypto.news, analysts at TRM Labs found that deposits to addresses linked to Chinese pharmaceutical manufacturers more than doubled in the first four months of 2024 compared to the same period in 2023. In 2023, Chinese lead networks account for over $26 million, with 11 manufacturers accounting for “more than 70% of all sales of crypto-denominated pharmaceutical precursors.”

“Crypto funds sent to Chinese lead producers primarily come from unhosted wallets, cryptocurrency exchanges and payment services; Manufacturers’ wallets are mostly hosted on exchanges.”

TRM Laboratories

Data shows that approximately 60% of crypto payment volume to Chinese lead generators occurs on the Bitcoin blockchain, followed by 30% on the TRON blockchain and approximately 6% on the Ethereum blockchain. Despite the rise in crypto payments, Chinese manufacturers also seem comfortable accepting payments in fiat currencies via PayPal, MoneyGram, Western Union and bank transfers.

Selling medicines with Blockchain | Source: TRM Laboratories

According to TRM Labs’ research, China mostly targets Canada, the Netherlands, Australia, Germany and the USA as the most preferred countries for shipping drug precursors. However, there are also advertisements for mephedrone precursors targeting Russia and neighboring countries.

In April, a US congressional committee reported that China was fueling the US opioid crisis by subsidizing the production of illicit fentanyl precursors. The committee reportedly found that China provides value-added tax relief to companies producing fentanyl analogues, precursors and other synthetic narcotics, provided they sell them outside China.

As Elliptic, another blockchain intelligence firm, previously noted, fentanyl is favored by drug cartels due to its lower cost of production and 50 times stronger potency than heroin, making it the leading cause of death for Americans ages 18-45. makes it into