the flow of money in chemical shops revealed by Chainalysis

In base a un report di Chainalysisover the past seven years, chemical shops suspected of having connections to drug trafficking have received a total of 250 million dollars in crypto.

The document claims to have identified thousands of wallets associated with illegal manufacturers of drug ingredients. Let’s see all the details below.

Chainalysis: suspected links between chemical stores and crypto transactions

As anticipated, since 2015, chemical shops suspected of links to illegal narcotics networks have received a total of $250 million in crypto, according to a recent report by Chainalysis.

The document reveals that a quarter of a billion dollars in cryptocurrencies flowed into digital wallets associated with suspicious chemical stores between July 2015 and February 2024.

From the total sum, Chainalysis claims that approximately $100 million has been allocated to drug production facilities in China.

The recipients of the transactions, according to Chainalysis, are chemical precursor shops or drug production sites. In particular, these process crucial ingredients for the production of illegal narcotics, such as fentanyl and heroin.

The latest report includes thousands of previously unidentified wallets with connections to chemical stores, the research firm said in a press release.

This data set includes both exchange deposit addresses and various unique on-chain services and wallets.

Chainalysis’s current report identifies a higher dollar amount for suspicious drug-related transactions than estimates reported in its previous year’s report.

New and old discoveries of Chainalysis

In the 2023 report, Chainalysis estimated that almost 38 million dollars in digital tokens had flowed into wallets belonging to chemical precursor shops between January 2018 and April 2023. This was done using a more limited data set.

It is unclear whether Chainalysis’s latest findings reflect an increase in drug-related cryptocurrency transactions.

Or whether the apparent increase in inflows into drug-related portfolios is the result of the firm’s decision to analyze more portfolios over a longer period this year.

Tracking digital funds linked to illicit drug production is difficult due to the secretive nature of the illicit drug trade.

In 2019, China was identified as the largest global producer of fentanyl precursors, according to a report from Drug Enforcement Administration (DEA).

Since then, the DEA has pressured China to shut down precursor chemical networks, which it says fuel the illicit drug trade.

Last October, eight Chinese pharmaceutical companies and their employees were indicted by federal officials on drug-related crimes.

The decrease in criminal activities with crypto according to Chainalysis

According to another new Crypto Crime Report 2024 from Chainalysis, the amount of funds sent to illicit addresses in 2023 indicates a decrease of criminal activities based on cryptocurrencies.

The value received from illicit cryptocurrency addresses dropped to $24.2 billion last year. Contrary to the $39.6 billion recorded in 2022, as highlighted in the market intelligence report.

Chainalysis specifies that the figures could still change, as the funds sent to addresses not yet identified as illicit have not been fully accounted for.

The report highlights a decrease in 29.2% in scam revenue, while ‘romantic’ scam tactics have become more widespread.

“Romance scams, in particular, grew significantly in 2023, more than doubling revenue year over year. Our data suggests that romance scam activity has grown 85-fold since 2020.”

Chainalysis highlights concern over the growing number of ‘romance’ scams, as they have the worst impact on victims based on the average payment amount.

‘Romance’ scams are also harder to spot, as scammers target individuals rather than the masses.

“We still believe that insights into romance scams, in particular, suffer from underreporting. We hypothesize that the true damage from the scams is greater than reports to the FBI and our on-chain metrics show.”