Key Highlights
- Two Chinese companies and six people were charged for selling fentanyl-related chemicals to a Mexican cartel using cryptocurrency.
- The group used crypto to move and hide funds, later converting them into cash through banks.
- Authorities are actively targeting drug crimes, as past reports show millions of dollars in digital currency linked to fentanyl chemical sales.
The U.S. Department of Justice (DOJ) has charged two China-based pharmaceutical companies, Shandong Believe Chemical Company and Shandong Ranhang Biotechnology, along with six individuals, for allegedly using cryptocurrency to sell chemicals used in fentanyl production to the Gulf Cartel in Mexico.
The charges were returned on Tuesday by a federal grand jury in Dayton, Ohio, and include money laundering, international criminal financing, and attempting to provide material support to a designated terrorist organization.
How the accused used crypto to launder money
According to the official release, the companies pretended to be normal pharmaceutical businesses while selling chemicals that can be turned into fentanyl.
The Mexican cartel reportedly paid for these chemicals using cryptocurrency, which was sent to digital wallets controlled by the six suspects, identified as Hanson Zhao, Gao Yanpeng, Xia Yi, Zhang Jian, Wang Zhaolan, and Zhang Chunhai.
The funds were then transferred to agents, who converted the cryptocurrency into traditional money through international banks to hide the origin of illegal funds. Authorities said a Binance account containing $26,000 in cryptocurrency may be forfeited if the defendants are convicted.
Three of the defendants are also charged with trying to give support to the Gulf Cartel, one of Mexico’s oldest criminal organizations. The cartel has been around since the 1930s, and they are heavily involved in drug trafficking, kidnapping, extortion, and human smuggling. It was officially labeled a terrorist organization in 2025.
U.S. Attorney Dominick S. Gerace II said the indictment “marks the first time in the Southern District of Ohio that we have brought charges for providing material support to a Mexican drug cartel designated as a foreign terrorist organization… We are going after the entire chain of supply for these deadly drugs, from Mexican cartels and Chinese pharmaceutical companies to the high-level distributors on our streets in the Southern District of Ohio.”
FBI Cincinnati Special Agent in Charge Jason Cromartie added that “the FBI is aggressively pursuing individuals and companies in China that are selling dangerous narcotics and working with terrorist organizations.”
Authorities continue crackdown on drug business
Authorities said the investigation was carried out by the FBI and China’s Ministry of Public Security, which shared key intelligence.
Meanwhile, a 2023 report from Elliptic found that about $32 million in cryptocurrency had been traced to the sales of fentanyl precursors. In a separate 2024 case, U.S. authorities charged another network that allegedly used Chinese underground money exchanges and crypto to move funds connected to drug trafficking. These cases highlight how digital assets are being used in illicit drug operations.
Also Read: CBI Cracks Down on GainBitcoin in India, Arrests CTO Over $720M Scam
