China has been home to the largest chemical industry by revenue in the world since 2011. A 2020 Drug Enforcement Administration (DEA) intelligence report cited China as the top producer of fentanyl precursors in 2019. The DEA has noted a pattern of fentanyl production in which precursor chemicals are illegally shipped to Latin America, where they are used to manufacture fentanyl, which is then transported into the U.S. to be sold.

Due to recent law enforcement actions and sanctions, we know that many illicit actors involved in fentanyl-related transactions use cryptocurrency. To analyze these patterns at scale, Chainalysis identified cryptocurrency addresses associated with suspected China-based fentanyl precursor sellers. These addresses have received more than $37.8 million worth of cryptocurrency since 2018. Latin America, North America, Europe, and Asia exhibit a high degree of exposure to these suspected chemical shop addresses.