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New DEA Report Highlights the Darkweb and Bitcoin

The Drug Enforcement Administration released their 2020 National Drug Threat Assessment which outlined threats posed to the country through the various forms of drug trafficking. The report covered darkweb markets and cryptocurrencies as well as traditional drug trafficking methods.

DEA Acting Administrator D. Christopher Evans:

“This year’s report shows the harsh reality of the drug threats facing communities across the United States. While the COVID-19 pandemic plagues this nation, so, too, do transnational criminal organizations and violent street gangs, adjusting to pandemic restrictions to flood our communities with dangerous drugs. DEA and our local, state, and federal partners continue to adapt to the ever changing landscape, remaining focused on the current threats and looking to the horizon for emerging threats. We will always defend the American people against illicit substances that ruin lives, devastate families, and destroy communities.”

2020 NDTA findings of note, per the DEA:

  • Mexican Transnational Criminal Organizations (TCOs) remain the greatest criminal drug threat in the United States.
  • Illicit fentanyl is one of the primary drugs fueling the epidemic of overdose deaths in the United States, while heroin and prescription opioids remain significant challenges to public health and law enforcement.
  • Mexican cartels are increasingly responsible for producing and supplying fentanyl to the U.S. market. China remains a key source of supply for the precursor chemicals that Mexican cartels use to produce the large amounts of fentanyl they are smuggling into the United States.
  • Drug-poisoning deaths and seizures involving methamphetamine have risen sharply as Mexican TCOs increase the drug’s availability and expand the domestic market.
  • Constraints associated with the 2020 COVID-19 pandemic – daily travel restrictions, U.S. border closings, closure of nonessential businesses, and broad shelter-in-place orders – temporarily posed new challenges to criminal organizations’ movement of drugs during the first half of 2020.

The report includes nine references to the darkweb. The first appears in a section about the transportation of heroin and fentanyl:

Fentanyl distributors in the United States also continue to order fentanyl, FRCs, and other synthetic opioids, such as U-47700, directly from manufacturers in China via the Internet including the dark web, with delivery accomplished by international mail and commercial parcel services. China-sourced fentanyl typically is smuggled in small volumes and generally tested over 90 percent pure. In 2019, U.S. law enforcement continued to seize China-sourced fentanyl though in smaller volumes and with fewer occurrences than previous years.

The second was an example of a drug seizure in the synthetic cathinone section:

In April 2020, DEA’s Savannah, Georgia RO along with the U.S. Secret Service and the U.S. Postal Inspection Service obtained 20 suspected eutylone pills from a dark web supplier. The pills were ordered and arrived in a heat sealed package containing 24 pills with a variety of colors and stamps.

The third cited the darkweb as a source of the Flualprazolam in a section about Other Emerging NPSs:

Flualprazolam is a designer benzodiazepine with a relatively short onset of action, similar to alprazolam. As of March 2020, the United Nations Commission on Narcotic Drugs decided to add flualprazolam to Schedule IV of the 1971 Convention on Psychotropic Substances. The drug has been marketed as a research chemical since at least 2017 and, similar to isotonitazene, users often purchase the drug through online marketplaces and dark web marketplaces.

The fourth is in the illicit financing section of the report in a paragraph about shipping delays caused by people reacting to the coronavirus:

DTOs and TCOs continue to generate tens of billions of dollars in illicit proceeds through the sale of drugs every year in the United States. Illicit drug proceeds change hands numerous times between the smuggling, wholesale, or retail levels of the illegal drug market. The onset of the COVID-19 pandemic caused significant shifts in the money laundering landscape. Border restrictions between the United States and Mexico, as well as concerns regarding exposure to the virus have made it more difficult for TCOs to transport loads of bulk currency across the SWB. Trade-Based Money Laundering (TBML) activity has been disrupted due to shipping delays around the world. These shipping delays also disrupt dark web marketplace vendors who are already vulnerable to fluctuations of virtual currencies held in escrow while drugs are traveling in the mail.

The fifth and sixth were in the same section:

Dark web marketplaces trading in illicit drugs have experienced disruptions due to the COVID-19 pandemic, due in part to drug shortages and shipping delays which exacerbate the risk of selling drugs for highly volatile virtual currencies. In March 2020, the value of Bitcoin rapidly dropped, which caused a withdrawal of many dark web vendors from the market for fear of loss of funds due to the possibility of Bitcoin devaluation while in escrow. Delays of drug shipments means that funds may be held in escrow for longer periods, which gives more time for their value to decrease before the drug dealer is able to convert the funds into fiat currency.

The seventh and eighth as well:

DEA’s Denver Field Division reported shortages of a variety of illicit drugs available on the dark web, as well as shipping delays due to COVID-19 restrictions. Many dark web marketplace sellers were taking extra precautions to sanitize their products and packaging prior to transport, possibly adding to the shipping delays.

The ninth was part of a section about virtual currencies in general. That section is perhaps the most relevant to this side of the internet:

There are over 2,000 distinct virtual currencies in circulation, with more being developed every year; however, Bitcoin continues to be the most widely used due to its status as one of the original virtual currencies. Bitcoin is sometimes a stand-in term, for virtual currency as a whole. In recent years, virtual currency exchangers have emerged as a service to ease the conversion of fiat currency into virtual currency and vice versa. Virtual currencies continue to be popular for use on dark web marketplaces as a method for users to anonymously purchase illicit drugs without having to use traditional payment methods that pose a greater risk of exposing the individual’s true identity.

NDTA: pdf, html