OFAC sanctions Sinaloa crypto money laundering network tied to fentanyl

The US Treasury’s OFAC sanctioned individuals and entities tied to the Sinaloa Cartel, alleging they used cryptocurrency networks for crypto money laundering linked to fentanyl and other narcotics trafficking. The updated case describes how the network converted US drug proceeds into cryptocurrency and routed profits back to Mexico using blockchain-based crypto addresses, cash pickups, and intermediaries. New details add leadership claims and convictions tied to the laundering operation. The Treasury says Jesus Gonzalez Penuelas led the drug trafficking network in the US, while Armando de Jesus Ojeda Aviles became a primary launderer for Los Chapitos after Mario Alberto Jimenez Castro was murdered. Rodrigo Alarcon Palomares was indicted in Colorado in April 2024 and later convicted on counts involving laundering drug proceeds via cryptocurrency; the report also notes weapons and ammunition were found at his October 2023 arrest. OFAC also named additional associates, including Jesus Alonso Aispuro Felix and multiple Romero family members, described as money brokers, security advisors, and “front” persons. Treasury said the designations block assets for listed parties and for entities with 50%+ ownership. For crypto traders, the key takeaway is ongoing regulatory pressure over crypto money laundering channels tied to high-volume drug flows. While this is not a token-specific announcement, it can reinforce compliance-driven risk controls across exchanges, custodians, and on-chain services.