U.S. Treasury Department Blocks Mexican Cartel's Virtual Asset Addresses... "Drug Funds Flowing Through Blockchain?"

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The U.S. Department of the Treasury's Office of Foreign Assets Control (OFAC) has imposed sanctions on individuals and entities linked to Mexican cartels involved in drug trafficking and cryptocurrency-based money laundering. The sanctions target individuals and organizations that led a network to launder the proceeds from fentanyl and other drug trafficking by the Sinaloa Cartel.

Cryptopotato reported, citing the Treasury Department's announcement, that the money laundering organization repatriated criminal proceeds to Mexico through blockchain networks. A multi-year investigation by U.S. authorities revealed that Jesus Gonzalez Penuelas led an illegal drug trafficking network within the United States, and Armando de Jesus Ojeda Aviles spearheaded the laundering of criminal proceeds on behalf of the Sinaloa Cartel.

The U.S. has designated the Sinaloa Cartel as a Foreign Terrorist Organization (FTO). The cartel has been identified as responsible for numerous violent deaths in Mexico and drug-related deaths in the United States. It was reported that the sons of incarcerated drug trafficker Joaquin “El Chapo” Guzman Loera are currently operating the Sinaloa Cartel with the support of recently sanctioned individuals.

Aviles, while coordinating drug trafficking in Mexico, entrusted associates such as Penuelas and Rodrigo Alarcon Palomares with cash collection and mediating transfers via cryptocurrency addresses. The drugs sold included cocaine and methamphetamine.

The U.S. District Court for Colorado indicted Palomares in April 2024 on charges of laundering drug proceeds. Palomares was convicted on three counts of laundering drug proceeds through cryptocurrency. Mexican authorities discovered weapons and ammunition during Palomares' arrest in October 2023. Cryptopotato reported that even after Palomares' arrest, the Sinaloa Cartel's trafficking activities intensified.

Aviles' network included Mexico-based drug suppliers, money brokers, and large-scale wire transfer coordinators across the U.S. Aviles was also linked to Los Chapitos, a hardline faction of the Sinaloa Cartel, and rose to become the organization's key money launderer after his predecessor, Mario Alberto Jimenez Castro, was murdered.

In addition to Aviles and Penuelas, the Treasury Department also added Jesus Alonso Aispuro Felix, businessman Alfredo Orozco Romero, Amalia Margarita Romero Moreno, and Liliana Orozco Romero to the sanctions list. Many of these individuals reportedly served as money brokers, security advisors, and trusted nominees.

Treasury Secretary Scott Bessent stated, “As President Donald Trump has made clear, this administration will not allow drug terrorists to push poison across our borders.” These sanctions were presented as a measure to protect American communities and citizens.

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