The Canadian government has raised concerns about the increasing use of cryptocurrencies in the illegal opioid trade, particularly in fentanyl and other synthetic drugs.
Virtual Currencies and Drug Trafficking
A recent operational alert from the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) outlines how cryptocurrencies like Bitcoin, Ethereum, Tether, and USD Coin are being used to facilitate the international drug trade while bypassing traditional financial systems. FINTRAC highlights the role of darknet marketplaces in connecting fentanyl producers and buyers.
Project Guardian and Anti-Money Laundering
These findings build on work conducted under Project Guardian, a public-private initiative designed to combat the laundering of proceeds from synthetic opioid trafficking. Key participants include the Royal Canadian Mounted Police, Canada Post, Canadian Imperial Bank of Commerce, and the Canada Border Services Agency. The project focuses on identifying financial transaction patterns linked to synthetic opioid trafficking.
Transaction Monitoring and Risks
Micro-traffickers, who often use postal and courier services to ship small quantities of drugs, are increasingly turning to virtual currencies for global sales. Meanwhile, large-scale distribution networks exploit freight corridors, particularly in Vancouver and Toronto, to transport precursors and finished opioids. FINTRAC's alert encourages financial institutions to closely monitor cryptocurrency transactions associated with darknet marketplaces, privacy-focused smart contracts, or mixing services.
Canadian authorities continue to strengthen their focus on the link between cryptocurrencies and the illegal drug trade, urging financial organizations to implement stricter monitoring of related transactions.
