How bitcoin and cryptocurrencies are fueling America’s opioid crisis

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The first things police seized when they raided Shamo’s home and stash house were bags of cash, gold bars, a Ford pickup and a BMW. It took another year for his bitcoin to show up in court paper.

“It’s really been a process that we’ve never dealt with before,” said Skordas, Shamo’s attorney. “I’m old enough to remember when we did everything with cash.”

In Washington, lawmakers and federal authorities believe stopping the flow of fentanyl means cracking down on cryptocurrencies as well.

A bipartisan bill from Sens. Chuck Grassley, R-Iowa, and Dianne Feinstein, D-Calif., would create new language explicitly requiring digital currencies to comply with laws against money laundering. Attorney General Jeff Sessions has called the use of bitcoin on the dark web “a big problem.” Earlier this year, he launched a task force targeting fentanyl sales over the internet.

“It will help us make more arrests of those selling these deadly substances online as well as shut down the marketplaces that these drug dealers use — and ultimately help us reduce addiction and overdoses in this community and across the nation,” Sessions said in January during a speech in Pennsylvania.

But crypto advocates argue that digital currencies are getting unnecessarily swept up in the rush to find a solution.

“Cryptocurrencies do not kill people. Opiates are killing tens of thousands of people a year,” said Perianne Boring, president of the Chamber of Digital Commerce. “Blaming bitcoin for this crisis would make as much sense as blaming the internet or cars that drug traffickers have to use.”

Bitcoin users are not anonymous, industry groups say. They’re “pseudononymous”: Buying bitcoin requires real money. Many users convert that cash through cryptocurrency exchangers that collect personal information. And they have to change their bitcoin back to real money once they’re ready to spend it.

That’s where law enforcement can swoop in.

“One of the things we look for are pressure points,” said a Justice Department official, who requested anonymity to protect ongoing investigations. “At some point, bitcoin is only as good as where you can spend it. You look at where the currency enters the mainstream financial system in order to get spent.”



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