Crypto Predicted Fentanyl Reduction Months Before Overdose Deaths: Chainalysis

Cryptocurrency flows to suspected smuggling services drop by 85% by 2025.

Cryptocurrency payments to suppliers of fentanyl precursor chemicals began to fall in mid-2023, months before overdose deaths decreased.

This pattern suggests that blockchain data may provide the first signal of disruption in the supply of illegal drugs, according to a new report from Chainalysis.

Pre-Fentanyl Disruption

The blockchain data company saw a measurable drop in on-chain payments linked to sellers of chemicals commonly used in the production of fentanyl before official death statistics showed a drop in deaths. Because overdose data is often released with delays due to investigation and certification processes, previous reports of crypto transactions point to a potential three-to-six-month lag between supply chain stress and public health consequences.

The findings suggest that blockchain tracking payments to precursor providers could provide law enforcement and policymakers with an early signal of changes in synthetic opioid supply, alongside traditional measures such as drug uptake and overdose death data.

The report also documented a significant increase in cryptocurrency activity tied to suspected human trafficking networks. By 2025, crypto flows to identified services have increased by 85% year-on-year, reaching hundreds of millions of dollars. According to Chainalysis, much of that activity is concentrated in Southeast Asia, where human trafficking runs through a combination of scams, online gambling platforms, and Chinese-language money-laundering networks that operate mostly through Telegram.

The company has identified four main categories of alleged crypto-facilitated trafficking – Telegram-based services for “international escorts” believed to be human traffickers, “recruitment” agents who recruit workers for scam companies, prostitution networks, and child sex abuse material (CSAM) dealers.

Payment patterns vary by category. “International escort” services and prostitution networks rely heavily on stablecoins, which offer price stability and ease of conversion. CSAM merchants have historically favored bitcoin but are increasingly using other Layer 1 networks and privacy-focused assets such as Monero, and are often turning to fast exchangers that allow quick exchanges without know-your-customer requirements. The company said the changes make tracking efforts more difficult but still leave visible patterns in the chain.

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The Infrastructure Behind Crypto-Based Exploitation

Transaction size data shows different performance properties. Over 48% of referrals associated with Telegram-based “international escort” services were recorded to be over $10,000, indicating organized operations at scale. Prostitution networks showed a high concentration of transactions between $1,000 and $10,000, which corresponded to middle-class agency work.

Meanwhile, payments to “on-the-job” agents who are recognized by scam compounds generally fall within the same range of $1,000 to $10,000. This practice is accompanied by advertised funds for transporting workers across borders. Victims recruited through these channels are often forced to use online fraud schemes under the threat of violence, according to an earlier report cited in the analysis.

The report also found that some escort and rental services are linked to Chinese-language money-laundering networks and “verification” platforms that quickly convert stablecoins into local currencies, thereby reducing exposure to potential fraud.

In the CSAM sector, operators are increasingly using subscription-based models, which often charge less than $100 per month, to generate recurring revenue. Chainalysis also observed overlap between CSAM networks and online risk communities, as well as the use of US-based web infrastructure to host additional websites while operators may be located abroad.