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Chinese and Guatemalan Individuals with Blacklisted Bitcoin Addresses Sanctioned by US Office of Foreign Assets Control


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On April 14, the United States Office of Foreign Assets Control (OFAC), part of the Treasury Department, imposed sanctions on five individuals and two companies based in China that supplied raw ingredients used to manufacture opiates to cartels in Mexico.

OFAC sanctions

Among the five people sanctioned was 32-year-old Wang Hongfei, a Chinese national residing in Hebei, whose bitcoin (BTC) address had been blacklisted by US authorities. Hongfei’s details are shown, including his association with Wuhan Shuokang Biological Technology. Yao Huatao, who is also approved by OFAC, owns the company.

The US authorities believe that Hongfei was dealing in cryptocurrency. Specifically, OFAC investigators linked Hongfei to a Bitcoin address: “3PKiHs4GY4rFg8dpppNVPXGPqMX6K2cBML.”

Onchain data shows that the wallet has received 15.24498106 BTC ($461.695). A large part, 14.27992264 BTC (432,399), has been withdrawn. Only 0.96505842 BTC ($29,222) remains in the wallet.

Investigators have reason to believe that Huatao was responsible for overseeing the sale of fentanyl precursors to drug cartels in Mexico. The sales were processed through Ana Gabriela Rubio Zea, a Guatemalan national, who carried out sales on behalf of the cartel. The opiates were then processed and smuggled into the United States, fueling the current epidemic.

The fentanyl overdose crisis in the United States is the reason the White House is pressuring Beijing to curb the illegal supply chains of raw materials flowing across the Pacific. The explosion of fentanyl and other synthetic drugs could threaten national security, said Dr. Rahul Gupta, a White House drug expert.

US agencies are now getting involved by punishing those allegedly involved.

However, this is not the first time that OFAC has acted.

Over the past five years, Chainalysis data shows that the number of sanctioned cryptocurrency addresses and entities has increased. In 2022, OFAC imposed over 300 unique addresses, more than triple the number in the previous year.

Topping the list is the Lazarus Group, a hacking group linked to the North Korean government. Sanctions have also been imposed on Task Force Rosich, a Russian paramilitary group in Ukraine, for its invasion of Ukraine.

Cryptocurrency is resistant to censorship

The global, trustless nature of cryptocurrencies, including bitcoin, means that the underlying networks can be misused for illegal activities.

Although OFAC can “block” addresses, sanctioned individuals can still create other addresses and continue their activities. However, all of their on-chain actions will be visible, and the authorities can still keep track of the money.

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