Chinese Drug Traffickers Used Bitcoin For Money Laundering, Says US Agency

The United States Office of Foreign Assets Control (OFAC), a division of the Treasury Department, sanctioned 4 Chinese citizens for purportedly using digital assets to launder gains from illegitimate drug dealings.

The treasury department published a press release regarding the development on Friday. As per the press release, Guangfu Zheng, Longbao Zhang, Songyan Ji, and Guifeng Cheng, as well as Global Biotechnology Inc., provided support to the Zheng Drug Trafficking Organization under the Foreign Narcotics Kingpin Act.

Notably, Zheng Drug Trafficking Organization was also listed in an earlier sanctions effort by the Office of Foreign Assets Control, when the division added three Chinese citizens to its Specially Designated Nationals list as drug traffickers last year.

The release mentioned,

“The Zheng DTO laundered its drug proceeds in part by using digital currency such as bitcoin, transmitted drug proceeds into and out of bank accounts in China and Hong Kong, and bypassed currency restrictions and reporting requirements.”

Apart from last year’s actions, OFAC has also sanctioned 2 Iranian citizens it claimed were involved in laundering funds from a ransomware, which targeted government agencies and private establishments.