Blocking Digital Cashflows: OFAC Disrupts Fentanyl Supply Chain with Crypto Sanctions

The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) has sanctioned two Indian nationals and an India-based online pharmacy for their involvement in a fentanyl trafficking operation that used cryptocurrency to facilitate transactions. Sadiq Abbas Habib Sayyed and Khizar Mohammad Iqbal Shaikh were designated under Executive Order 14059 for their role in distributing counterfeit prescription pills laced with fentanyl, methamphetamine, and synthetic opioids to U.S. consumers. The online pharmacy, KS International Traders (KS Pharmacy), owned by Shaikh, was also sanctioned for its role in the criminal network. These individuals and entities collaborated with traffickers in the Dominican Republic and the United States, leveraging encrypted messaging platforms and a cryptocurrency wallet to market and sell the illicit drugs Treasury Sanctions Indian Nationals and Online …^[1].

The operation, which spanned multiple jurisdictions, involved marketing counterfeit pills as legitimate pharmaceuticals such as Oxycodone, Adderall, and Xanax. These pills were instead filled with dangerous synthetic opioids, often deceiving U.S. consumers who believed they were purchasing authentic medications. Sayyed and Shaikh were previously indicted in September 2024 by a federal grand jury in New York on narcotics-related charges. Despite the indictment, Shaikh continued operating KS International Traders, highlighting the persistent nature of the criminal activity OFAC Sanctions Two Indians in Crypto-Linked Fentanyl Operation^[2]. The use of cryptocurrency in this case underscores the growing role of digital assets in laundering proceeds and evading traditional financial oversight. OFAC emphasized that the sanctions aim to disrupt the drug supply chain, not merely punish offenders 2 Indians Sanctioned By US For Selling Fake Pills Filled With …^[3].

The sanctions freeze all U.S.-held property and financial interests of the designated individuals and entities. Transactions involving these assets are prohibited unless authorized by OFAC. Additionally, any entities owned 50% or more by the sanctioned parties are also blocked. Violations could result in civil or criminal penalties, with OFAC enforcing strict liability for sanctions breaches US sanctions 2 Indians for supplying counterfeit fentanyl-laced …^[4]. The action aligns with broader U.S. efforts to combat the opioid crisis, which has caused over 450,000 deaths in the past decade, with fentanyl as the primary driver. The Drug Enforcement Administration (DEA) has noted a surge in counterfeit pills from online pharmacies, many of which operate under deceptive branding to mimic legitimate medical suppliers US treasury sanctions two Indians, online pharmacy for supplying ...^[5].

The U.S.-India Drug Policy Framework, established to address cross-border drug trafficking, has seen increased collaboration between the two nations. The Treasury highlighted that online pharmacies in India have contributed to the fentanyl crisis by supplying precursor chemicals and synthetic opioids to U.S. and Mexican cartels. This case exemplifies the transnational nature of drug trafficking networks, where digital tools and encrypted communication enable covert operations US Sanctions Indians for fake fentanyl-laden pills^[6]. The DEA issued a warning in October 2024 about the dangers of illicit online pharmacies, citing a rise in counterfeit pills shipped to unsuspecting U.S. consumers OFAC Sanctions and Crypto Transactions Statistics …^[7].

Analysis of the sanctions reveals a strategic focus on intercepting financial flows that sustain illicit drug operations. The cryptocurrency wallet linked to Sayyed was explicitly targeted, reflecting OFAC’s expanding regulatory reach into digital asset transactions. As of 2025, OFAC has sanctioned 1,245 crypto wallets linked to illicit activities, with Bitcoin dominating 63% of these designations. The average time between wallet designation and enforcement action has shortened to 72 hours, demonstrating improved coordination with crypto exchanges . This case also aligns with broader U.S. efforts to combat fentanyl precursors, including recent visa revocations for Indian executives involved in trafficking.