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- Treasury sanctions crypto brokers accused of laundering Sinaloa Cartel fentanyl proceeds.
- Officials linked cryptocurrency transfers directly to cartel cash collection operations nationwide.
- U.S. authorities expand crackdown targeting digital assets used within narcotics networks.
The Officials of the United States Treasury Department (UST) have hit a cryptocurrency money laundering network believed to be aiding the Sinaloa Cartel in the movement of fentanyl profits through international borders. The operation involved changing the bulk cash that had been collected inside the United States into digital currency and passing it on to groups linked to the cartels in Mexico, authorities said.
Over a dozen individuals and entities associated with two criminal groups related to the cartel were sanctioned by the Office of Foreign Assets Control. One of the top players in the laundering network was identified as Armando de Jesus Ojeda Aviles. He was charged with orchestrating cash collection and covertly converting money into cryptocurrencies for drug money. Jesus Gonzalez Penuelas was also identified by the Treasury officials as the leader of another trafficking and laundering unit. Both groups were involved in operations related to the distribution of fentanyl and other unlawful drugs associated with the Sinaloa Cartel, according to OFAC.
The network was said to use cryptocurrency transactions, Mexican-based brokers and couriers in the United States. Additionally, investigators connected the building to the Los Chapitos, a faction of the Sinaloa Cartel under the brothers Ivan and Alfredo Guzman Salazar, who are both the sons of Joaquin “El Chapo” Guzman.
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Crypto Transfers Played Major Role in Cartel Money Movement
Federal investigators said they received large sums of cash across the United States and then changed the cash to cryptocurrency. It then passed the digital assets to leadership of the cartels in Mexico. The authorities suspect the building played a role in laundering drugs and in bypassing the usual banking controls. Several operators who were accused of being involved in the laundering were also identified by OFAC. According to officials, Jesus Alonso Aispuro Felix apparently facilitated cryptocurrency transactions related to the network. At the same time, Rodrigo Alarcon Palomares was allegedly responsible for collecting monies related to the activities of the organisation.
Treasury officials said all assets and financial interests of sanctioned individuals are now frozen within the United States. Furthermore, U.S. citizens and businesses may not engage in business with those people or their companies. The officials also said that any entity which has more than 50% stake in it of sanctioned persons automatically comes under the restrictions. The new move, therefore, could throw a curveball into multiple financial avenues allegedly employed by cartels to launder drug money via the cryptocurrency system.
Overall, the sanctions highlight the increasing enforcement action by U.S. authorities against criminal groups that are increasingly using cryptocurrencies for money laundering. Treasury officials are rolling out more initiatives to cut off digital payment channels for fentanyl trafficking operations.
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