Drug Traffickers Are Increasingly Using Crypto in China

Published on 30 July 2022 at 16:16

Although China’s anti-drug measures have been generally successful, authorities have seen an increase in drug traffickers’ use of the internet and cryptocurrencies.

In 2021, China’s anti-drug departments “earnestly implemented” General Secretary Xi Jinping’s instructions on reducing illicit drug use. The measures have resulted in success by most standards. Although drug crimes and drug abuse have generally decreased, the Chinese government has noted an increase in drug money laundering via cryptocurrencies. In addition, people are increasingly turning to the internet to buy and sell drugs.

General Figures

  • By the end of 2021, there were 1.486 million drug users in China, down 17.5% from 2020;
  • After three years of abstinence, 3.403 million people had relapsed, up 13.4% since 2020;
  • 121,000 people used drugs for the first time, down 21.7% year on year;
  • The number of existing drug abusers and newly discovered drug abusers decreased for five consecutive years;
  • Among existing drug users, 556,000 abused heroin, 793,000 methamphetamine, 37,000 ketamine and 18,000 marijuana, down 19%, 18.5%, 9% and 10.7% respectively;
  • Foreign suppliers account for the majority of drugs seized;
  • Police seized 17.3 tons of methamphetamine, ketamine, and other “mainstream drugs,” of which 15.3 tons came from overseas and two tons from domestic manufacturers, down 21.7% and 48.2%, respectively;
  • Police seized 690 kilograms of cocaine from South America in 2021. Cocaine seizures increased by 18.6%;
  • People are importing more marijuana from North America. Police seized 308.9 kilograms of marijuana which is an increase, an increase of 4.5 times the amount of marijuana seized in 2020. Most of the seized marijuana was found in mail packages shipped from the United States;
  • Police destroyed 123 drug production sites and seized 1.2 tons of drugs at those sites, decreasing 26.4% and 89%, respectively; and
  • “The circulation of drug funds has expanded from online bank transfers to cryptocurrency and in-game currency,” per the report.

 

“neither fear hardship nor death”

 

Postal System

According to the report, the decrease in domestically available drugs changed how drug traffickers operated. Traditional methods of drug trafficking decreased while the use of the postal system and waterways increased. People used the internet to buy drugs more frequently than in previous years, although the report did not reveal the size of the increase.

 

Internet-Based Drug Trafficking

Police arrested 0.8 million people and seized 0.5 tons of drugs in connection with online drug trafficking, accounting for 10.4% and 2% of the national total. Of the 800,000 arrests, authorities secured only 500,000 convictions.

 

Cryptocurrencies

As the online drug market expands, people are increasingly using cryptocurrencies, game coins, and other online payment methods to pay or receive drug payments. According to the report’s conclusion, China’s anti-drug sector will continue to adapt to the changes in the drug trafficking environment. Targeting internet-based drug trafficking is one of the sector’s top priorities.

 


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