How to Disrupt Money Laundering from Fentanyl with AML Compliance?

North America’s synthetic opioid crisis is a public health emergency and a financial crime problem rolled into one.

To understand the scale of this problem let’s recall recent figures posted by the USA and Canadian Authorities. Centers for Disease Control & Prevention’s (CDC) provisional figures show more than 80,000 drug overdose deaths in the United States in 2024. Deaths involving opioids decreased from an estimated 83,140 in 2023 to 54,743 in 2024, yet the toll remains staggering. On the other hand, Canada reported that 74 percent of apparent opioid toxicity deaths in 2024 involved fentanyl.

Moreover, numbers reported by authorities in recent enforcement actions show the scale of the problem and difficulty in deterring this threat.

The DEA seized more than 60 million fentanyl-laced pills and nearly 8,000 pounds of powder in 2024. Figures for 2025 seizures already amount to hundreds of millions of lethal doses. U.S. Customs and Border Protection continues to intercept massive quantities at the Southwest border, while the DEA attributes most U.S. fentanyl supply to Mexican cartels.

For anti-money laundering (AML) compliance teams, these data points translate into one reality. The huge profits from this illicit and lethal drug trafficking are entering the financial system everyday.

What are synthetic opioids?

Synthetic opioids are lab-made alternatives to natural opioids like morphine (a pain relieving drug) obtained from poppy plants. Fentanyl is an example of synthetic opioid that can be medically prescribed in extreme cases, where other drugs don’t work. However, fentanyl is approximately 100 times more powerful than morphine and 50 times than heroin.

Such high potency means a very small amount, as low as 2mg, can prove fatal. This potentially lethal dose was found in 42% of the pills tested for fentanyl, a Drug Enforcement Administration (DEA) analysis found.

What is fentanyl trafficking?

Fentanyl trafficking means illegal production, distribution and sale of fentanyl. Illicit producers can synthesize it using readily available precursor chemicals, convert them in pill shape with cheap equipment, and scale distribution quickly (it doesn’t need to go through different cycles as in the case of plant-based drugs).

FATF and FinCEN note that these properties make synthetic opioid trafficking attractive to organized crime because they minimize costs, simplify logistics compared to plant-based drugs, and generate outsized margins.

How do fentanyl trafficking money move through the financial system?

The synthetic opioid economy depends on laundering. FATF’s global study and FINTRAC’s 2025 operational alert describe a versatile toolkit used to convert cash sales and wholesale proceeds from fentanyl trafficking into apparently legitimate funds:

• Cash-intensive layering frequent small cash deposits below reporting thresholds and rapid movement through flow-through accounts
• Email money transfers and wires bursts of e-transfers among unrelated parties and wires to chemical brokers or traders, often routed via intermediary jurisdictions
• Trade based money laundering mis-described chemicals, front or shell companies, and third-party intermediaries to move value across borders
• Virtual assets and the dark web payments for precursors and retail sales with conversion back to fiat through exchanges
• Professional money launderers and Chinese money brokers in Mexico specialists offering fast, low-margin value transfer, mirror transfers, and underground bankin
• Online gambling payment processors cycling e-transfer funds in and out to disguise proceeds as betting activity and “winnings”.

These are not theoretical. They are distilled from suspicious transaction reports, casework, and multi-agency intelligence.

What regulators expect from FIs to stop illegal fentanyl trade?

United States

In 2019 FinCEN issued an advisory on illicit activity involving fentanyl and other synthetic opioids with specific red flags and a required SAR key term. Filers should reference “FIN-2019-A006” in SAR Field 2 and detail indicators in the narrative.

FinCEN’s 2024 supplemental advisory updates red flags tied to precursors, pill presses, darknet vendors and virtual asset flows.

In June 2025, Treasury used new authorities under the FEND Off Fentanyl Act to issue unprecedented orders targeting certain Mexico-based institutions connected to illicit opioid trafficking, signaling far tighter expectations for cross-border due diligence and payment transparency.

Canada

FINTRAC’s January 2025 Operational Alert provides indicators derived from analysis of 5,000 fentanyl-related STRs from 2020 to 2023.

It highlights the use of e-transfers, flow-through accounts, nominees, online gambling processors, and courier or freight networks, and urges detailed indicator-driven STR narratives.

Project Guardian

Launched in 2018, it is a public-private partnership effort, focused on combating the money laundering aspect of illegal activities related to synthetic opioids. This partner is led by Canadian Imperial Bank of Commerce (CIBC) and supported by Royal Canadian Mounted Police (RCMP), FINTRAC and other international partners. Under Project Guardian, FINTRAC has shared more than 1000 tactical financial intelligence disclosures.

Mexico

The Unidad de Inteligencia Financiera (UIF) works alongside FINTRAC and FinCEN through the NDAA’s Illicit Financing Working Group, coordinating typologies and indicators specific to synthetic opioids.

North American Drug Dialogue (NDAA)

It is a high-level continental forum where health and law enforcement officials from Canada, Mexico and USA regularly meet to discuss current and emerging threats from drugs including fentanyl facing each country and the continent broadly.

Global Expectations

FATF urges that financial investigations should follow the drug money across precursor supply chains, participate in public-private partnership models, and make use of risk indicators for online marketplaces and virtual assets.

How to detect fentanyl threats faster?

Map exposure to the fentanyl supply chain including customers in chemical trade, lab equipment, freight forwarding and high-risk marketplaces; align triggers to FATF, FinCEN and FINTRAC indicators.

Banks watch for bursty e-transfer inflows from multiple unrelated senders, rapid pass-through activity with minimal payroll or bill-pay behavior, frequent drafts payable to self, and wires to chemical brokers in higher-risk geographies routed via intermediaries.

MSBs and payment companies monitor structured cash deposits under thresholds, repeated load-withdraw cycles, and flows to or from payment processors known to be linked to online gambling platforms that do not fit the customer profile.

Crypto firms flag interactions with darknet marketplace addresses, mixers, high-risk OTC brokers, and cash-intensive on- and off-ramp activity inconsistent with stated wealth. Cross-reference with FinCEN’s fentanyl red flags and update typologies for chemical suppliers and pill-press vendors.

Trade Finance should apply TBML controls. Add rule checks for generic product descriptions, frequent amendments, inconsistent invoicing, and third-party intermediaries not aligned with the trade.

How to Fight the Fentanyl Crisis with AML Compliance?

The threat cuts across banks, credit unions, MSBs, crypto platforms, fintechs, insurers, gaming, freight and logistics, and DNFBP. A strong response should include identifying and incorporating red flags into day-to-day controls.

Strengthen onboarding and KYC

Calibrate risk scoring for profiles which have one or more links to identified patterns. These already known patterns include shell importers of pharma or chemical inputs, freight and courier businesses with unusual use of cash, and links to online gambling platforms. Map beneficial ownership and control to detect professional laundering networks. Require source-of-funds, beneficial ownership clarity and verification of legitimate business purpose

Tighten payments surveillance

Build scenarios for rapid in-and-out e-transfer bursts, serial small deposits with peer-to-peer pass-through, recurring wires to brokers in higher-risk chemical hubs via intermediaries, and card or ACH activity linked to known gambling processors.

Add virtual asset typologies where your risk exposure warrants. Moreover, ensure originator and beneficiary fields meet Recommendation 16 standards and U.S. expectations in light of 2025 Treasury orders.

Screen and monitor against up-to-date designations and advisories

Monitor OFAC and FinCEN actions related to fentanyl supply chains and implement any FinCEN orders on prohibited transmittals or enhanced due diligence immediately. Keep an eye on FATF and national FIU updates for new indicators.

Targeted adverse media screening

Use targeted adverse media in order to filter out indicators linked to precursors, pill presses, online gambling processors and cartel facilitators; reduce noise to escalate faster.

Enhance SAR/STR quality

Use the FinCEN advisory key term “FIN-2019-A006” in Field 2 for U.S. SARs linked to synthetic opioids, and follow FINTRAC guidance to describe the full constellation of indicators in Part G. Document how activity maps to typologies rather than citing a single trigger.

Collaborate and share

Participate in public-private partnerships and information-sharing arrangements such as FinCEN Exchange, Project Guardian, and 314(b) information-sharing to close intelligence gaps quickly. Many of the most actionable fentanyl drug trafficking typologies emerged from bank-FIU-law enforcement collaboration.

Common Mistakes FIs Need to Avoid in Fight Against Drug Money Laundering

De-risking entire categories can push activity into less transparent channels without reducing exposure. FATF continues to advocate for a risk-based approach that avoids blunt exits and focuses on controls proportional to actual risk.

Static data or stale screening causes misses and noisy alerts. High-quality AML data needs to be comprehensive, frequently refreshed, and configurable to your risk profile to surface the fentanyl-linked patterns hidden in ordinary traffic.

How AML Watcher’s Solutions Enable Fight Against Fentanyl Drug Trafficking?

High-quality screening data and precise risk context shorten the time from alert to decision. AML Watcher provides sanctions, PEP and adverse media data with global, high-frequency updates and structured context that helps teams move faster and miss less.

• Real-time, proprietary data with 15-minute refreshes and coverage of 215+ sanctions regimes, enabling ongoing screening that stays aligned to rapidly evolving designations.
• Adverse media at scale across 80+ languages with configurable categories to reduce noise and focus on fentanyl-relevant risks; sentiment analysis helps separate mentions from meaningful risk.
• PEP depth with 2.6M+ profiles spanning 235+ countries and jurisdictions to support enhanced due diligence where organized crime or corruption risk intersects opioid trafficking.
• Clear secondary sanctions labeling to distinguish primary from secondary exposure, crucial as U.S. authorities escalate actions connected to the fentanyl supply chain.

Fentanyl’s economics will keep attracting criminal networks unless financial flows become harder to hide. The public-sector guidance is clear. Financial institutions, crypto firms, MSBs and other obliged entities can materially disrupt this market by tightening screening data, tuning scenarios to the latest typologies, and collaborating across borders.