[THREAD] 👇*warning: it's a long one*
Yesterday, Treasury sanctioned 11 BTC addresses (& 1 LTC address) belonging to Chinese narcotics traffickers. Here is what I've been able to dig up about them...
treasury.gov/resource-cente…
These sanctioned individuals have operated a highly sophisticated drug manufacturing and smuggling operation for years, contributing to the U.S. opioid crisis and the death of many Americans latimes.com/politics/la-na…
The U.S. government has had its eyes on these individuals for a bit now. Sessions charged two of the traffickers in Aug. 2018 with "Operating Global Opioid and Drug Manufacturing Conspiracy" justice.gov/opa/pr/two-chi…
The first 6 sanctioned addresses all belong to the same wallet (let's call it Wallet A) which contains 37 total addresses, meaning that there are potentially 29 other addresses in need of sanctioning... walletexplorer.com/wallet/120ea7e…
Wallet A was active from Feb. 2013-Sept.2017 and regularly conducted transactions with now-defunct dark marketplaces, such as Silk Road, BTC-e, and Agora Market. But, it also often had transactions involving active exchanges BTCC (formerly BTCChina) and FoxBit.
Most of the transactions involving BTCC and FoxBit were from 2015, when it was commonplace for exchanges to have lax user regulations. It is likely, at least in the case of BTCC, that the exchange has since reformed its regulatory policies.
The most lucrative address in Wallet A was involved in 101 transactions ultimately receiving roughly 1,200 BTC, or 12 million dollars today. blockchain.com/btc/address/1E…
Outside of Wallet A, the other 5 addresses divulge slightly less information. However, 2 of them are addresses created through the exchange BitStamp and another one received money through BitStamp several times.
The use of BitStamp's platform to aid in funding this operation is pretty shocking. This exchange has gone to great lengths to be compliant in the U.S. Likewise, the BitStamp addresses were active mainly in 2017 and 2018 -- not too long ago.
reuters.com/article/us-cry…
The last transaction from any of these sanctioned BTC addresses was on July 9, 2019. blockchain.com/btc/tx/1978057…
So, why is it so important that OFAC is designating these addresses? (Especially since freezing an address ultimately doesn't do too much since it's so easy to make another...)
Well, sanctioning these addresses does more than just call into question the addresses. It also increases scrutiny for everything related to those addresses, whether it be an exchange or a wallet service or a tumbler or mixer.
Treasury is showing that it is not scared to call out those in the crypto space. Right now they might just be designating addresses, but they could move on to sanctioning exchanges or entire currencies. It'll be interesting to see how future crypto designations will play out...
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