Ken Blackwell is Senior Fellow for Human Rights and Constitutional Governance at Family Research Council. This article appeared in Daily Caller on August 30, 2024.
The open border policies of the Biden-Harris administration continue to allow dangerous criminal networks and drugs to pour into our country.
Authorities seized 26,700 pounds of illicit fentanyl at the southern border last year — a 480% increase from 2020’s interception of 4,600 pounds. This is a staggering amount, as just one kilogram of fentanyl can kill 500,000 people.
While most Americans understand the threat of skyrocketing lawlessness at the border, they may not realize that it is enabled by an unexpected middleman: unregulated cryptocurrency platforms. This is an issue that must debated in the light of day.
Before substances like fentanyl ever reach the southern border, their creation, purchase and entry are planned in an elaborate underground scheme by foreign nationals who often use unregulated crypto platforms as a digital financial safe harbor to disguise their crimes.
In fact, the Drug Enforcement Administration found that cryptocurrency has become a preferred tool of drug trafficking organizations because it allows funds to be quickly transferred across international borders and disguises connection to criminal activity on encrypted blockchains.
One of the most prominent forms of cryptocurrency used for this purpose is Tether, otherwise known as USDT. As the largest stablecoin in the world, Tether has over 300 million users worldwide and its reported reserves exceed $118 billion, topping the reserves of all but 17 of the world’s governments. Tether’s platform company is not based in the United States and is not regulated by any transparency standards.
Drug traffickers actively utilize stablecoins like Tether, which hold value, to funnel illicit funds into and out of currency like the U.S. dollar (USD). Users can easily transfer funds anonymously between USDT and traditional currencies without worrying about fluctuations in market value. Suppliers from China, a main source of the chemicals used in fentanyl production, frequently use Tether to profit off the sale of illicit substances while avoiding traceable involvement.
A January 2024 report by the United Nations Office of Drugs and Crime said stablecoins such as Tether are the “cryptocurrency of choice of organized crime in East and Southeast Asia.” The report found that Tether “has become a preferred choice for regional cyberfraud operations and money launderers alike due to its stability and the ease, anonymity, and low fees of its Transactions.”
This is only possible because of America’s weak border policies, including the lack of regulation and transparency in offshore crypto organizations, which allow foreign nationals to use Tether as a breeding ground for international crime.
And legislators do not appear poised to rectify the situation. Over the past two years, the White House and the U.S. Department of the Treasury have called upon Congress to authorize sanctions on crypto transactions which fund illicit activity, but their pleas were ignored. Similarly, no action has been taken on a bipartisan cryptocurrency money laundering prevention bill introduced last year by Sens. Kirsten Gillibrand and Cynthia Lummis.
While lawmakers drag their feet, the use of crypto as a gateway for illicit finance continues to be a national security and public health emergency. Nearly 150 Americans are killed daily by synthetic opioids like fentanyl, tragic casualties of an epidemic fueled by criminal smuggling and illicit transactions.
Without immediate action, nefarious actors will continue using Tether to finance the opioid epidemic. Unregulated actors like Tether are exploited by criminals.
Our leaders must act now to prevent future deaths.
