US Agency Says Chinese Drug Traffickers Used Bitcoin to Launder Proceeds

The U.S. Office of Foreign Assets Control (OFAC), a department of the Treasury Department, sanctioned 4 Chinese nationals for supposedly using cryptocurrency to wash proceeds from illegal drug purchases.

In a news release Friday, OFAC introduced that Songyan Ji, Longbao Zhang, Guifeng Cheng and also Guangfu Zheng, along with Global Biotechnology Inc., as supplying support to the Zheng Drug Trafficking Organization under the Foreign Narcotics Kingpin Act.

Zheng DTO was also noted in a previous permissions initiative by OFAC, when the department added Xiaobing Yan, Fujing Zheng and Guanghua Zheng to its Specially Designated Nationals (SDN) listing as narcotics traffickers last August.

“The Zheng DTO laundered its medication proceeds partly by utilizing electronic currency such as bitcoin, transferred medication proceeds right into as well as out of bank accounts in China as well as Hong Kong, and also bypassed money limitations and also reporting requirements,” the launch claimed.

Unlike last August’s action, no bitcoin or other crypto addresses were contributed to the assents listing. The launch also did not suggest the size of the supposed laundering.

OFAC’s activity means it is attempting to seize all home belonging to the people in the U.S., and also U.S. entities are now banned from dealing or transacting with the 4 designees.

Friday’s activity is just the third time cryptocurrency has actually come up in an OFAC assents update. The firm first suggested it would include crypto addresses to its assents list in March 2018, saying crypto would be treated identically to fiat money as much as the SDN listing was worried.

The SDN listing is OFAC’s blacklist for individuals or entities who the agency thinks has violated U.S. regulation.

In enhancement to last August’s actions, OFAC has also approved two Iranian residents it asserted were associated with laundering funds from the SamSam ransomware, which affected federal government firms and exclusive entities.

That activity, in 2018, marked the very first time bitcoin addresses showed up on the SDN checklist.

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