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TRM Labs Reports $26 Million Crypto Surge to Chinese Precursor Producers




In 2023, payments in cryptocurrencies to China-based precursor manufacturers surged to over $26 million, according to blockchain intelligence firm TRM Labs. This represents a sixfold increase from 2022.

TRM Labs’ data indicates that about $50 million, or 60 percent of the total crypto payments to these Chinese precursor makers, were conducted using Bitcoin. The TRON blockchain accounted for 30 percent of the payments, while Ethereum was used for 6 percent. These payments primarily originated from unhosted wallets, cryptocurrency exchanges, and payment services, with the manufacturers’ wallets being mainly hosted at exchanges.

Major Markets and Payment Methods

Chinese precursor manufacturers have been targeting markets in Canada, the Netherlands, Australia, Germany, and the United States. There are also advertisements aimed at Russia and other nearby countries for mephedrone precursors. These manufacturers accept fiat currency payments via PayPal, MoneyGram, Western Union, and bank transfers.


US Congressional Committee Findings

In April, a US congressional committee claimed that China supports the production of precursor chemicals used in manufacturing fentanyl, which is fueling the US opioid crisis. The committee noted that China offers value-added tax rebates to companies that produce fentanyl analogs and other synthetic narcotics’ precursors for export.

Rising Crypto Payments

TRM Labs’ analysis shows that deposits to addresses linked to Chinese drug manufacturers increased by 106 percent in the first four months of 2024 compared to the same period in 2023. The report identified 11 manufacturers responsible for over seventy percent of all cryptocurrency-based drug precursor sales.

The Growing Use of Cryptocurrency in the Drug Trade


The use of cryptocurrency by Chinese drug makers is increasing due to its ability to obscure transaction details and facilitate easy transfers. This trend reflects the broader movement towards digital currencies replacing traditional payment methods in the drug trade. Blockchain intelligence firms like TRM Labs and Elliptic have been monitoring these developments. Elliptic has noted that fentanyl is favored by drug cartels because it is cheaper to produce and more potent than heroin. This is particularly concerning in light of the ongoing opioid epidemic in the United States, where fentanyl is the leading cause of death among individuals aged 18-45.


The post TRM Labs Reports $26 Million Crypto Surge to Chinese Precursor Producers appeared first on HIPTHER Alerts.

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Brazil to Tighten Regulation on Foreign Crypto Exchanges




Brazil’s Receita Federal Increases Scrutiny on Foreign Cryptocurrency Exchanges

Brazil’s tax authority, Receita Federal, plans to intensify its oversight of foreign cryptocurrency exchanges operating within the country. This move aims to enhance regulation and transparency amid the rising use of digital assets in Latin America’s largest economy.

New Reporting Requirements for International Platforms
Recent reports indicate that Receita Federal will soon issue an order requiring international cryptocurrency platforms, including Binance and Coinbase, to provide detailed operational data and information on their partnerships with local service providers.

Government’s Regulatory Focus
Andrea Chaves, Deputy Secretary of Inspection at the Federal Revenue Service, emphasized the importance of this measure. “It’s crucial for us to understand how they operate here and ensure there’s no illegality,” she stated. The government aims to ensure compliance with tax laws and confirm that services provided to Brazilian customers are fully legal.


Wagner Lima, a risk management coordinator at Receita Federal, underscored the need to review collaborations between foreign exchanges and local service providers. This review ensures compliance with a 2019 regulation that mandates information sharing.

Rise in Crypto Asset Declarations
This decision comes in response to a significant increase in crypto asset declarations by Brazilians. From January to July 2023, Brazilians declared 133.6 billion reais ($24.6 billion) in crypto assets, marking a 36.6% increase from the previous year. Notably, 14.5 billion reais were declared through foreign exchanges, representing a 51.2% growth.

Upcoming Order Details
The forthcoming order will require exchanges to disclose their operational methods and customer service practices in Brazil. However, it will exclude customer-specific data and transactional information to comply with current Brazilian laws.

Future Regulatory Framework
Brazilian authorities are also working on developing a clear framework for digital currencies and their legal status, expected to be introduced by mid-2024. This framework aims to organize both local and foreign exchanges operating within Brazil, ensuring their compliance with local laws and regulatory requirements.



The post Brazil to Tighten Regulation on Foreign Crypto Exchanges appeared first on HIPTHER Alerts.

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