The U.S. Treasury Department has sanctioned more than a dozen people and entities accused of using cryptocurrency to launder drug proceeds for Mexico’s Sinaloa Cartel, tightening pressure on the financial infrastructure behind fentanyl and other narcotics trafficking.
The Office of Foreign Assets Control (OFAC) said the targeted networks converted U.S. drug sales into digital assets, then routed the funds back to cartel leaders in Mexico. All property and interests in property of those designated that fall under U.S. jurisdiction are now frozen, and U.S. persons are barred from dealing with them.
Key figures and networks named
Among those designated is Armando de Jesus Ojeda Aviles, identified by OFAC as the head of a laundering ring managing proceeds for the cartel. Another is Jesus Gonzalez Penuelas, described as a fugitive who runs a separate trafficking and laundering network.
Treasury officials said the network relied on:
- cryptocurrency transfers
- cash pickups in the United States
- coordination with brokers in Mexico tied to the Los Chapitos faction, led by Ivan and Alfredo Guzman Salazar, sons of Joaquin Guzman Loera
Those named allegedly moved funds from U.S. drug transactions into digital currencies and then back into cartel-controlled accounts overseas.
Authorities said Ojeda Aviles oversaw domestic cash pickups, while associates including Jesus Alonso Aispuro Felix and Rodrigo Alarcon Palomares handled digital asset transfers and cash deliveries. The structure was designed to conceal the criminal origin of the funds and ensure payments to cartel leadership in Mexico.
Direct sanctions on ethereum addresses
In a notable escalation, OFAC publicly identified six ethereum wallet addresses linked to the laundering activity and added them to its sanctions list. This step effectively blacklists those addresses for any U.S. person or business, extending restrictions beyond individuals and companies to specific on-chain infrastructure.
The move sends a warning to the broader digital asset ecosystem: virtual asset service providers that process transactions involving these addresses risk sanctions exposure. Treasury has increasingly used this approach; in 2025, more than half of all cryptocurrency addresses it designated were tied to illicit drug markets.
Successor to earlier laundering operation
Officials said the Ojeda Aviles network is believed to be the successor to an earlier laundering operation run by Mario Alberto Jimenez Castro, who was sanctioned in September 2023 over similar digital currency activities.
Enforcement pressure has been building. The Drug Enforcement Administration reported seizing more than $10 million in crypto assets from the Sinaloa Cartel in 2025, reflecting a broader shift to target the group’s financial backbone.
Blockchains as an investigative tool
Treasury and law enforcement agencies emphasized that digital assets do not provide criminals with guaranteed anonymity. The public and permanent nature of blockchain records enables authorities to track fund flows and map out complex networks.
That transparency has become a core tool in efforts to disrupt the financial operations of trafficking organizations, even as those groups experiment with new methods like crypto mixers and cross-border brokers.
Illicit use grows in value, shrinks in share
Data cited by officials show that while illegal crypto activity remains a small slice of the overall market, its absolute scale has increased. Illicit wallets received an estimated $158 billion in 2025.
However, as on-chain activity has expanded, the share tied to illicit use fell to 1.2% in 2025 from 1.3% in 2024, indicating that legitimate use is growing faster than criminal activity.
Compliance pressure on digital asset platforms
For traders and market participants, the new sanctions highlight rising expectations around compliance across the digital asset sector. Treasury’s action underscores that:
- exchanges, brokers, and wallet providers are expected to screen for sanctioned individuals, entities, and wallet addresses
- failure to block transactions with blacklisted addresses can trigger enforcement action or secondary sanctions
- services with weak anti-money laundering (AML) controls pose heightened risk, as funds can be “tainted” through association
Authorities are paying particular attention to cash-to-crypto “on-ramps,” including over-the-counter brokers and services that connect traditional banking with digital assets. These bridges are now under intense scrutiny as potential chokepoints for cartel-linked money flows.
Worried about crypto crime and regulation? Learn how platforms adapt in our guide on U.S. crypto regulation today.
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