U.S. case links fentanyl supply chains to crypto payments, exposing structured stablecoin flows and global networks.
Federal prosecutors in Ohio indicted two Chinese pharmaceutical companies and six Chinese nationals, accusing them of supplying fentanyl precursor chemicals and directing drug traffickers to pay through cryptocurrency.
The charges allege that the defendants controlled crypto payment flows tied to illicit shipments of substances used to dilute and expand fentanyl production. According to prosecutors, the scheme forms part of a broader effort to disrupt international fentanyl networks, not just street-level distribution.
Federal Agents Link Chemical Firms to Fentanyl Manufacturing Network
Names tied to the indictment include Shandong Believe Chemical Company Pte Ltd. and Shandong Ranhang Biotechnology Co. Ltd., along with six individuals. According to a Wednesday statement, the companies allegedly marketed and sold chemical precursors and “cutting agents” used in the manufacture of fentanyl.
Prosecutors specifically cited medetomidine, an animal tranquilizer they described as a cutting agent that can increase the yield of a kilogram of fentanyl by at least twenty times, creating millions of doses.
Federal agents filed the case as part of the FBI’s “Operation Box Cutter,” which targets cross-border fentanyl networks. Three suspects are also accused of attempting to support a Mexican cartel labeled as a foreign terrorist group.
In the event of a guilty verdict, the defendants could receive life sentences for drug trafficking, plus extra prison time for money laundering and terrorism-related charges.
97% of China-Based Precursor Firms Accept Crypto, Report Finds
Authorities also focused on how crypto payments moved through the alleged operation. The government claims customers were told to send funds to wallets controlled by the defendants before proceeds were routed to overseas financial institutions.
Prosecutors described a “layering” pattern in which stablecoins first arrived at an initial collection address. Afterwards, it was split into pass-through wallets and finally converted to fiat at a cross-border exit point.
A Wednesday report from TRM Labs said such payment structures appear common in the precursor trade.
The firm reported that about 97% of China-based drug precursor manufacturers accept crypto payments.
It added that on-chain inflows to those vendors reached about $39.1 million in 2025, rising from roughly $34.7 million in 2024 and $30.9 million in 2023.
U.S. Attorney Dominick S. Gerace II said prosecutors aim to pursue the full chain of supply for fentanyl, from foreign suppliers and payment actors to distributors selling drugs in the Southern District of Ohio.
