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The illegal trade in fentanyl – a powerful opioid that is between 50 and 100 times more potent than morphine – is a deadly enterprise involving organized crime groups in China, Mexico and much of the Western world. And in 2023, US law enforcement agencies have seized enough fentanyl to kill every citizen of the United States.
Death rates from fentanyl consumption and increasing enforcement measures against dealers have even scared many cybercriminals away from facilitating its trade. Dark web drug operators and sellers are aware of the heightened scrutiny and seizure efforts that come from storing fentanyl – resulting in many banning it altogether.
Dark web market rules prohibit the sale of fentanyl on their platforms.
Elliptic’s research into the role of cryptocurrencies in the fentanyl trade found that these rules are often not strictly enforced. Many sellers still sell fentanyl on mainstream dark web markets, disguised using names like “China White” and hashtags like “fetty” or “synthetic.”
“China White” is likely to be α-Methylfentany – a potent fentanyl analogue – but it can be difficult to determine its composition as traffickers use a range of chemicals based on what they can obtain in pre-production.
One dark web marketplace—the retired “ASAP Market”—was particularly selective in enforcing its apparent “fentanyl-free” policy. The image below shows the list disguised as “Synthetic Chinese White”.
ASAP Market lists fentanyl, despite the alleged ban on the drug.
In fact, Elliptic’s internal analysis identified no fewer than 14 vendors who sold fentanyl to ASAP Market sellers, receiving Bitcoin payments totaling approximately $108,000. Direct payments from suppliers to suppliers, and subsequent payments from ASAP Market after the sale, are shown in the Elliptic Investigator chart below.
Elliptic Investigator shows ASAP Market sellers buying fentanyl from Chinese suppliers.
ASAP Market isn’t the only dark web marketplace that—allegedly unintentionally—facilitates the fentanyl trade. The Investigator chart below shows that some vendors are active in a number of other dark markets, including Incognito, Vice City Market, and World Market. This supplier cluster receives fentanyl from suppliers based in Shanghai, China.
A cluster of fentanyl suppliers operating on numerous dark web markets.
This is probably not a new trend, and many sellers probably deal in other drugs in addition to fentanyl. Clusters of suppliers paying bitcoin to fentanyl suppliers have also been identified interacting with since-offline dark web marketplaces such as Silk Road and Hydra.
Our research also shows that, in addition to darknet markets, some darknet vendors have established smaller online stores selling fentanyl. The chain’s records reveal that one of them – called “One Stop Shop Pharmacy Online” – obtained fentanyl from dealer Alex Peijnenburg, who was sanctioned by the Office of Foreign Assets Control (OFAC).
One Stop Shop Pharmacy Online buys from Alex Peijnenburg, who obtained the chemicals from Hebei 4.
Supplier-Supplier Relationship
Our research indicates that it is likely that some Chinese brokers are actively involved in selling chemicals on the darknet. For example, we identified sellers on the Incognito Market who sourced from China a number of chemicals offered by most of the Chinese suppliers we studied.
In another case, we identified chain payments between a cluster of suppliers and suppliers of tablet presses and molds – the equipment needed to produce precursors. This indicates that some suppliers are directly involved in production and procurement, as well as further distribution.
A likely Chinese vendor trading on the Incognito market.
Implications for preventing the use of cryptocurrencies in the fentanyl trade
Our analysis revealed that dark web vendors purchased $0.5 million worth of fentanyl from dealers. While this is dwarfed by the direct export trade – which exceeds $32 million in cryptocurrency – some key implications remain for curbing the fentanyl trade.
The first is that many dark web markets—while outwardly distancing themselves from the fentanyl trade—continue to be either willing or unwitting intermediaries for facilitating the buying and selling of deadly opioids. Although the volumes observed by Elliptic are relatively insignificant compared to other aspects of the global fentanyl trade, the failure of dark web markets to enforce their own rules increases the risk that they will become a key facilitator in the future.
Another implication is how these risks are assessed and detected. No matter how sellers try to hide their fentanyl listings on the dark web, their activities can still be exposed through blockchain analytics.
Elliptic Investigator’s graphs above highlight these possibilities – making it easy to uncover any connections between dark web markets or suppliers to fentanyl suppliers. This highlights how, in this case, the transparency of a cryptoasset can be used to identify activities that illegal actors may have gone to great lengths to conceal.
How Elliptic can help
Elliptic has compiled a comprehensive dataset of crypto wallets used by fentanyl dealers to facilitate this deadly trade. Our Nexus block analysis engine can be used to track the on-chain activity of these dealers – including money laundering or dark web activity.
We also routinely monitor Dark Web markets for additional risk factors, such as fentanyl and firearms trafficking. Our research and investigations team also focuses on identifying new ways that sellers use to conceal the trade of such illicit goods.
You can download our Crypto and Global Fentanyl Trade report here. Alternatively, contact us for more information or schedule a demo.
