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Drug Money Now Flowing Into Crypto, Chinese Anti-Drug Agency Says

Drug money has started flowing into the cryptocurrency market as trading in these illegal substances expands over the internet, a new Chinese government agency report has said.

Attributed to the China Anti-Drug Network, the report says the new phenomenon took off in 2021 and has seen illicit funds from drug-related activities flow through online bank transfers to cryptocurrencies and game currencies. 

It adds that the extension to the internet increased the use of more money and drug for payment, as well as the trading mode and the contactless drug trafficking methods.

“Hook trading has developed from mass chat tools to niche social tools, second-hand trading platforms, game platforms, and even the dark web,” a loose translation of a section of the report states. “Drug capital circulation is extended from online banking transfers to virtual currencies and game coins.”

Cocaine smuggling to China mainly from South America remains the most traded with 690 kilograms of the drug seized in 2021 – an increase of 18.6% year-on-year – while the import of cannabis from North America saw 308.9 kilograms seizure, an increase of 4.5x year-on-year.

The “Golden Triangle” region – which includes parts of Burma, China, Laos, and Thailand – and the “Golden Crescent” region – an area of illicit opium production at the crossroads of Central, South, and Western Asia covering the mountains in Afghanistan, Pakistan, to eastern Iran – remain the most important for the illicit trade, the report says.

It also notes that China’s anti-narcotics departments will adapt to the development and changes in the country’s drug situation with a vow to further promote “special actions” aimed at “cleaning up the source and cutting off the flow” as they deepen their anti-drug work measures in 2022.

China banned all crypto-related activities including mining and transactions of any sort in 2021. The report came out as a Chinese Communist Party (CCP) newspaper warned Bitcoin investors to be ready for the top cryptocurrency’s price to go to zero.

Following the recent crash of Bitcoin price which saw it fall below $20,000 for the first time since 2020, the CCP’s Economic Daily newspaper – as reported by the South China Morning Post – wrote that Bitcoin is a string of digital codes that only brings returns when people buy low and sell high.

“In the future, once investors’ confidence collapses or when sovereign countries declare bitcoin illegal, it will return to its original value, which is utterly worthless,” The Economic Daily notes, and blames the lack of regulation as creating a market “full of manipulation and pseudo-technology concepts.”

Another illicit crypto-related issue that has recently emanated from Asia is the report that some fraudsters – majority of the perpetrators are reportedly from Southeast Asia according to the Global Anti-Scam Organization – are exploiting LinkedIn to lure users into cryptocurrency investment. 

The FBI’s Sean Ragan, says there are many potential victims for the scheme which has already cost some victims their life savings with losses ranging from $200,000 to $1.6 million.

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