US OFAC sanctions 5 individuals in China and Guatemala, bitcoin address blacklisted

April 18, 2023

By Sharan Kaur Phillora

On April 14, the office of foreign assets control (OFAC) sanctioned individuals and entities in China and Latin America for their role in fentanyl manufacturing and trafficking. One OFAC designation includes a Bitcoin address used to accept funds for the sale of fentanyl precursor chemicals made in China. 

Here’s what we know: 

The Department of Justice (DOJ) charged several individuals associated with this operation following an investigation by the DEA

Among the entities sanctioned today are two Chinese chemical companies: Wuhan Shuokang Biological Technology (WSBT) and Suzhou Xiaoli Pharmatech (SXPC). Four Chinese nationals associated with WSBT were also charged and sanctioned.

These companies stand accused of selling fentanyl precursor chemicals to LatAm-based brokers, who then sell them to drug cartels like the notorious Sinaloa Cartel based in Mexico. One such broker charged & sanctioned today is Guatemalan national Ana Gabriela Rubio Zea.

WSBT & SXPC accepted Bitcoin for the sale of fentanyl precursor chemicals. WSBT associate Wang Hongfei controlled at least one BTC address used for this activity, which was included in his OFAC SDN list entry. That address is 3PKiHs4GY4rFg8dpppNVPXGPqMX6K2cBML. 

Onchain data shows that the wallet had received 15.24498106 BTC ($461,695). A big chunk, 14.27992264 BTC (432,399), had been withdrawn. Only 0.96505842 BTC ($29,222) remains in the wallet. 

3PKi… is a deposit address hosted by a large cryptocurrency exchange. Since becoming active in Dec 2021, it has received $366K in BTC, both from other mainstream exchanges and the now-defunct darknet market Hydra. 

Analysis of Hongfei’s Bitcoin address, its activity, and the activity of other associated addresses provide an opportunity to better understand the crypto nexus between Mexican drug cartels and their chemical suppliers in China.

About the author

Sharan Kaur Phillora’s thirst for knowledge has led her to study many different subjects, including NFTs and Blockchain technology – two emerging technologies that will change how we interact with each other in the future. When she isn’t exploring a new idea or concept, she enjoys reading literary masterpieces.

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