Study Shows Slowdown in Crypto Fentanyl Sales

Research conducted by TRM Labs reveals that the growth rate of crypto-denominated fentanyl sales has slowed down in 2023. The first three quarters of the year saw an increase of just under 60% in these sales, a sharp decline from the 155% average growth rate recorded since 2019.

According to a study by TRM Labs, the growth of fentanyl sales denominated in cryptocurrency has slowed significantly in 2023. The research, spanning over 100 online vendors of fentanyl and its precursors, highlights a growth decrease to just under 60% for the first three quarters of 2023. The study indicates a potential link between this slowdown and the aggressive measures taken by the U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC).

OFAC Sanctions Linked to This Decline

TRM’s analysis reveals a correlation between major sanctions by the
U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) and a decline in online fentanyl sales involving cryptocurrency. Notably, sales volumes dropped significantly in April and May, coinciding with the sanctions, and saw another plunge in October following an unprecedented designation of 28 individuals and entities. While it’s challenging to attribute the decrease in crypto-related fentanyl sales solely to OFAC’s actions, these sanctions undoubtedly disrupt supply chains and increase risks for those engaging with targeted manufacturers. Despite the primarily China-based entities being less affected due to limited cooperation from Beijing with U.S. law enforcement, international buyers face heightened scrutiny from U.S. authorities.

However, the decrease in sales does not necessarily indicate a demand reduction. This suggests that new vendors will emerge to fill the gap left by those sanctioned. However, these new players will face increased pressure from U.S. and international law enforcement agencies.

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