Key Takeaways
- Chinese firms tied to alleged fentanyl supply chain.
- Criminals are increasingly using digital assets in illicit supply chains.
- Crypto crime is expanding beyond finance into physical risk.
U.S. authorities have charged six Chinese nationals and two Chinese pharmaceutical companies over an alleged scheme to supply chemicals used to manufacture fentanyl.
Investigators say the network relied on crypto payments to facilitate transactions.
The FBI said on Wednesday that the defendants instructed buyers to send funds to their crypto wallets, with proceeds later routed to financial institutions overseas.
What Happened?
A federal grand jury in Dayton, Ohio, charged the defendants with drug trafficking and money laundering linked to fentanyl production and distribution, prosecutors said.
Prosecutors said the group supplied chemical ingredients used to manufacture fentanyl as well as substances used to dilute the drug, allowing traffickers to expand the number of doses sold on the street.
The indictment names Shandong Believe Chemical Company Pte Ltd. and Shandong Ranhang Biotechnology Co. Ltd as the alleged issues, along with six individuals.
Authorities said some of the defendants also sought to do business with individuals they believed were affiliated with Mexico’s Gulf Cartel.
Crypto Payments
Investigators said the alleged scheme relied on crypto to move funds across borders, with payments sent to digital wallets and later transferred into accounts outside the U.S.
Officials have increasingly warned that drug trafficking networks are turning to digital assets to move money internationally while attempting to evade traditional banking oversight.
The case highlights a broader trend of criminals increasingly using crypto to obscure financial activity.
Unlike fiat transactions, crypto transfers can be routed through multiple jurisdictions to complicate enforcement efforts.
Authority Action
U.S. Attorney Dominick S. Gerace said the case marked the first time his office had brought charges involving material support for a cartel designated as a foreign terrorist organization.
“We are going after the entire chain of supply for these deadly drugs,” Gerace said, describing the case as part of broader efforts targeting suppliers, intermediaries and distributors.
FBI Cincinnati Special Agent in Charge Jason Cromartie said investigators were using “innovative approaches” to trace both drug supply networks and associated crypto transactions.
The defendants face charges including conspiracy to manufacture and distribute fentanyl, which carries a minimum sentence of 10 years in prison and up to life.
Physical Crypto Crime Surging
Beyond financial flows, crypto has also introduced new forms of physical risk, with attacks increasingly targeting individuals rather than institutions.
Unlike in traditional financial crime, holders directly secure digital assets using private keys or seed phrases.
Although blockchain systems are cryptographically secure, criminals can still access funds by using coercion.
Security experts refer to such incidents as “$5 wrench attacks,” where perpetrators bypass technical safeguards by physically threatening victims to gain control of their assets.
Documented cases across North America, Europe and Asia have included armed robberies, kidnappings, home invasions and extortion attempts targeting individuals believed to hold significant wealth.
In several instances, attackers identified victims through public information, including social media activity or appearances at industry events.
Data reviewed by CCN’s education team suggests that spikes in crypto prices may coincide with increased physical targeting of holders.
During the 2017 bitcoin rally — when prices surged from around $1,000 to nearly $20,000 — reported incidents of physical crypto-related attacks also rose, particularly among individuals with a visible presence in the crypto community.
Global Authorities Cracking Down
The case adds to a growing body of global investigations highlighting how criminal networks are increasingly using crypto to facilitate and conceal illicit activity.
Britain’s largest-ever seizure last year highlighted how authorities are adapting to increasingly sophisticated financial crime.
In 2025, London’s Metropolitan Police confiscated 61,000 Bitcoin following a seven-year investigation into an investment fraud scheme that originated in China between 2014 and 2017.
The scheme was linked to Chinese national Zhimin Qian, who had evaded authorities for years before investigators traced the proceeds of the fraud.
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Kurt Robson is a London-based reporter at CCN, specialising in the fast-moving worlds of crypto and emerging technology. He began his career covering local news in Cornwall after graduating from Falmouth University with First Class Honours in Journalism. There, he cut his teeth on everything from council meetings to missing swans.
He quickly rose through the ranks to become a frontline journalist at several of the UK’s leading national newspapers. Over the years, he has interviewed musicians and celebrities, reported from courtrooms and crime scenes, and secured multiple front-page exclusives.
Following the upheaval of the COVID-19 pandemic, Kurt shifted his focus to technology journalism—just ahead of the AI boom. With a natural curiosity and a trained eye for emerging trends, he has found a new rhythm in reporting on innovation.
At CCN, Kurt's work focuses on the cutting edge of crypto, blockchain, AI, and the evolving digital world. Drawing on his background in people-first reporting and his deep interest in disruptive tech, Kurt delivers stories that are insightful, entertaining, and human-centric.
