Treasury Report Highlights Role of Financial Transactions in America’s Fentanyl Crisis

The Trump administration is intensifying its efforts to resolve America’s fentanyl crisis. On April 9, the U.S. Department of the Treasury released a financial trend analysis of data linked to suspicious fentanyl-related transactions, reinforcing the importance of combatting the illicit finance that exacerbates the drug epidemic. Publishing financial data on methods used by fentanyl traffickers and money launderers is important because it helps U.S.-based banks and money service businesses understand the trends and patterns they use to access the American financial system.

In the report, Treasury’s Financial Crimes Enforcement Network (FinCEN) analyzed 1,246 Bank Secrecy Act (BSA) reports in 2024 that identified approximately $1.4 billion in suspicious transactions linked to fentanyl-related activity. FinCEN noted that financial institutions in every U.S. state and Washington, DC, reported fentanyl-related transactions.

New Analysis Shows Increased Perilous Activity

In January 2021, Congress directed FinCEN to publish threat pattern and trend information from BSA data. Unfortunately, FinCEN waited four years to analyze and publish the relevant information. Similarly, the Biden administration waited five years to update a 2019 FinCEN advisory on illicit financial schemes used during the trafficking of fentanyl.

The new FinCEN report stated that Mexico and China, including Hong Kong, were the “most frequently cited locations of companies and individuals reported in fentanyl-related filings with a foreign nexus.” Treasury noted that networks in these countries were crucial in the fentanyl precursor trade, fentanyl production, and the laundering of proceeds from fentanyl sales.

FinCEN also said that suspected Mexico-based chemical brokers routed payments through the United States for fentanyl precursor shipments from China. In one example, FinCEN noted that a Mexico-based company previously sent payments directly to China but used a U.S.-based company, owned by a Chinese national, as an intermediary.

Mexican Cartels in the U.S.

The Mexican cartels run a cash business inside the United States selling fentanyl-laced pills and other drugs. FinCEN noted that drug trafficking organizations can send money from the United States directly to Mexico. But FinCEN also highlighted the role of professional money laundering organizations, including networks of Chinese and Mexican nationals operating as money couriers.

Treasury previously explained in a February 2024 report that Chinese money laundering organizations operate a scheme to provide pesos to cartels in Mexico by selling U.S. dollars from drug proceeds to Chinese nationals in the United States. FinCEN said in its latest analysis that the Chinese money laundering organizations use “large cash deposits into personal and business checking accounts, including accounts purportedly associated with legitimate businesses, such as restaurants and salons.”

The money launderers transfer the drug proceeds to U.S.-based Chinese individuals who then transfer an equivalent amount in renminbi to bank accounts in China. The money launderers then use the Chinese currency to purchase items in China that they can export to Mexico and sell for pesos that are eventually transferred to the cartels.

U.S. Should Increase Pressure on Banks

The FinCEN reporting is an important step in the right direction to highlight the illicit financing of America’s fentanyl epidemic. Moving forward, the Trump administration can push U.S.- and Mexico-based financial institutions to maintain robust know-your-customer and other anti-money laundering controls to identify and stop these illicit transactions.

Unfortunately, Chinese banks are unwilling to adopt the same stringent international controls as U.S. banks. The Trump administration’s designation of Mexican cartels as foreign terrorist organizations (FTOs) in February 2025 allows victims to sue for civil damages for material support to FTOs, which increases the risks to Chinese banks that facilitate these transactions. But the Trump administration will need to use other tools, including sanctions against senior officials of Chinese banks, to increase the likelihood that Chinese banks will investigate these financial activities.

President Trump says he wants to end America’s fentanyl crisis. He should insist that Chinese banks stop these transactions or face the consequences.

Anthony Ruggiero is an adjunct senior fellow at the Foundation for Defense of Democracies (FDD). He previously served in the U.S. government for more than 19 years, including at the Department of the Treasury (2013-2016) and in the White House National Security Council (2018-2021). For more analysis from Anthony and FDD, please subscribe HERE. Follow Anthony on X @NatSecAnthony. Follow FDD on X @FDD. FDD is a Washington, DC-based, nonpartisan research institute focused on national security and foreign policy.