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According to a Chinese government report, drug traffickers continue using cryptocurrency transfers in 2021

CJ – Cryptocurrency Expert

  • Drug traffickers have started using cryptocurrencies as a means of money transmission, according to new Chinese research on the subject
  • This is due to the rising difficulty of using conventional means, including internet bank transfers
  • The survey adds that the same rationale is driving up the use of in-game money transactions

Cryptocurrencies are commonly associated with criminal activity because of their anonymity. In 2021, it will be harder for people to use online bank transfers, thus drug dealers are switching to cryptocurrency exchanges. The transition of drug money transfers from online bank transfers to cryptocurrency and gaming currency transactions will be the new trend in 2021, according to research released by the Chinese authorities.

The study found that while "Internet + logistical delivery" non-contact drug trafficking strategies have become more common, the drug market is still growing online, with increased usage of money, drug distribution, and person-to-person transaction models.

Hookup transactions can be facilitated via large chat rooms, specialized social networks, secondhand stores, gaming platforms, even the dark web. Additionally, the use of sophisticated technology has developed into a vital link in the drug trade.

The survey discovered that although online bank transfers remain the primary method of money movement for traffickers, crypto payments have grown in recent years. Bulk logistics now handles drug distribution along with minor deliveries, and the use of crypto assets and gaming currencies to enable drug trade transfers is becoming more widespread. Fentanyl and other synthetic opioid sales have increased as a result of virtual currency.

The fact that China's Supreme Court has ruled that using Bitcoin or any other cryptocurrency as a form of fundraising is prohibited underscores the country's continued tough stance on cryptocurrencies. The aforementioned research is likely to exacerbate the unfavorable perception of cryptocurrencies in China.

Although the transactions on the blockchain are anonymous, there are software tools in place and ones that are continually being developed to identify the sources of these transactions. For example, if you buy Ethereum or Bitcoin it is very possible to determine the source where it is coming from even if the wallet owner is anonymous.  Although this software is far from flawless and entirely accurate, it does contribute to a decrease in drug and money laundering. Cryptocurrency exchange platforms are the first ones to implement this, as a lot of people trade crypto to fiat and vice versa on these platforms.

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