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

▲ Cryptocurrency crime, fund freezing/AI generated image

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 sanctioned targets are individuals and organizations that led networks laundering the proceeds from fentanyl and other drug trafficking by the Sinaloa Cartel.

Criptopotato reported, citing the Treasury Department's announcement, that the money laundering organization returned criminal proceeds to Mexico via blockchain networks. A multi-year investigation by U.S. authorities identified Jesus Gonzalez Penuelas as leading an illegal drug trafficking network within the U.S., and Armando de Jesus Ojeda Aviles as orchestrating 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 U.S. It has been reported that the sons of imprisoned drug trafficker Joaquin “El Chapo” Guzman Loera are currently operating the Sinaloa Cartel with the support of the recently sanctioned individuals.

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

In April 2024, the U.S. District Court for the District of Colorado indicted Palomares 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. Criptopotato 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 made clear, this administration will not allow narco-terrorists to push poison into our borders.” The sanctions were presented as a measure to protect American communities and citizens.

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