Canada’s Financial Transactions and Reports Analysis Centre (FINTRAC) has issued a severe warning regarding the increasing use of cryptocurrencies to launder proceeds from synthetic fentanyl and opioid trafficking.
In its latest “Operational Alert”, published on January 23, 2025, FINTRAC highlighted the new role that cryptocurrencies are playing in fueling the growing problem of drug-related money laundering.
The agency outlined multiple new crypto-related risk factors and red flags, including large crypto-to-fiat conversions through newly created accounts, use of multiple wallets to obscure transaction origins, as well as deposits into crypto exchanges from accounts tied to high-risk regions or previously flagged for suspicious activity.
FINTRAC urged crypto service providers and other financial institutions to adopt these new risk factors as part of their Anti-Money Laundering (AML) strategies. The agency stressed the need for a collaborative approach across the crypto ecosystem to strengthen defences against money laundering tied to synthetic opioid trafficking.
Meanwhile, FINTRAC’s warning comes amid rising global concerns about the use of cryptocurrencies in criminal activities. The Eurasian Group on Combating Money Laundering (EAG) recently highlighted the growing sophistication of laundering operations. The Group, which comprises government officials from Russia, China, India, and Kazakhstan, emphasized the use of false-identity wallets (“droppers”), cryptocurrencies, and cash-in schemes linked to terrorism financing. They pointed out that foreign crypto platforms and wallets are significant enablers of illicit activities.
Additionally, a January 13 report from blockchain analytics platform PeckShield revealed a surge in crypto-facilitated money laundering related to hacking. The total value laundered in 2024 was pegged at $1.3 billion, a 280% increase from the previous year. Notably, the rise coincided with a boom in cryptocurrency prices, particularly Bitcoin, whose value doubled in 2024.
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