A New Jersey man has been sentenced to 12 years in federal prison for his role in a large-scale fentanyl trafficking operation that involved paying Chinese suppliers using Bitcoin and other methods.
The individual, William Panzera (53, from North Haledon, Passaic County, New Jersey), was sentenced on January 22 or 23, 2026 depending on reporting, following his conviction on charges of drug trafficking conspiracy and international promotional money laundering conspiracy.
According to the U.S. Department of Justice: From around 2014 to 2020, Panzera and his co-conspirators imported over a metric ton of fentanyl and related synthetic opioids and analogs from suppliers in China. They paid hundreds of thousands of dollars to these suppliers via bank wire transfers and Bitcoin.
Register for Tekedia Mini-MBA edition 19 (Feb 9 – May 2, 2026).
Register for Tekedia AI in Business Masterclass.
Join Tekedia Capital Syndicate and co-invest in great global startups.
Register for Tekedia AI Lab (class begins Jan 24 2026).
The drugs were distributed in bulk and pressed into counterfeit pharmaceutical pills like mimicking legitimate medications for sale across New Jersey and potentially beyond. Eight co-defendants have already pleaded guilty or been convicted in connection with the case.
This highlights ongoing U.S. efforts to combat the fentanyl crisis, where much of the precursor chemicals and finished product originates from Chinese sources, and cryptocurrencies like Bitcoin have been used in some cases for cross-border payments due to their pseudonymous nature, though blockchain transactions are traceable with sufficient investigation.
It underscores law enforcement’s increasing focus on tracing crypto in drug-related money laundering. Blockchain tracing is the process law enforcement uses to follow cryptocurrency transactions—like Bitcoin payments—across public blockchains to identify patterns, link wallet addresses to real-world identities, and build evidence in cases involving illicit activities, such as fentanyl trafficking from Chinese suppliers.
Bitcoin’s blockchain is a public, immutable ledger: every transaction is permanently recorded and visible to anyone. While Bitcoin is pseudonymous (addresses aren’t directly tied to names), it’s far from anonymous. Investigators can de-anonymize users by combining on-chain data with off-chain information.
Investigators obtain a known “seed” address or transaction, often from: Seized devices (phones, computers, hardware wallets like Trezor) showing wallet details or private keys. Undercover buys where agents pay with crypto and record the receiving address.
Exchange subpoenas e.g., when a suspect deposits and withdraws to/from a regulated platform like Coinbase. Tips, informants, or prior cases linking addresses to fentanyl vendors. Tools visualize the flow of funds: Clustering: Group addresses likely controlled by the same entity using heuristics like common spending patterns or change addresses.
Follow outgoing payments from a U.S. trafficker to a Chinese supplier wallet or trace incoming funds e.g., drug sale proceeds ? mixer ? supplier payment. Common patterns in fentanyl cases: Funds move from darknet market sales ? U.S./Mexico wallets ? direct or indirect transfers to Chinese chemical vendor addresses.
De-Anonymization and Attribution
Link addresses to identities via: KYC data from centralized exchanges (subpoenas force disclosure of user info). Off-ramps/on-ramps like crypto ATMs, peer-to-peer trades, or cash-out services.
OSINT (open-source intelligence): Forum posts, Telegram channels, vendor websites advertising crypto payments. Chainalysis Reactor, TRM Labs, Elliptic, or similar tools tag known illicit entities e.g., sanctioned Chinese precursor sellers or darknet markets.
Overcoming Obfuscation
Traffickers use mixers/tumblers, privacy coins, or bridges, but many in fentanyl cases especially direct China payments use straightforward Bitcoin transfers. Law enforcement often traces through: Exchange touchpoints where KYC applies. Repeated patterns or “peel chains” (small amounts split off repeatedly).
Even after mixers, partial traces or endpoint correlations help. U.S. investigations have used blockchain intelligence to forfeit millions e.g., $15M from a fentanyl vendor marketplace via HSI tracing Bitcoin withdrawals.
Chainalysis analyses show correlations between on-chain flows to suspected Chinese precursor shops and U.S. border fentanyl seizures. In civil forfeiture actions, funds from Mexican cartel-linked U.S. sales were traced directly to Chinese precursor supplier wallets, leading to multimillion-dollar seizures.
Cases like family-run U.S. labs like MonPham on darknet markets show payments to China-based manufacturers via traceable Bitcoin paths, combined with seized devices and messages. In the recent William Panzera case, the organization paid Chinese suppliers hundreds of thousands via wire transfers and Bitcoin.
While the public DOJ release doesn’t detail the exact tracing method, such cases typically rely on blockchain analysis to map crypto payments, link them to seized evidence, and prove the international promotional money laundering conspiracy.
Why It Succeeds Despite Perceived Anonymity
Bitcoin’s transparency is its weakness for criminals. Every transaction creates a permanent trail. When combined with traditional policing (searches, informants, exchange cooperation), blockchain tracing has become essential in fentanyl investigations—especially since much of the supply chain involves traceable cross-border crypto payments to Chinese sources.
This capability has helped agencies like the DEA, HSI, FBI, and IRS-CI disrupt networks, secure forfeitures, and support convictions in the ongoing opioid crisis.