The Office of Foreign Assets Control (OFAC) of the US Treasury Department announced a new sanctions decision targeting the Sinaloa Cartel’s money laundering activities through cryptocurrency. With this decision, announced in May 2026, more than 12 individuals and institutions that converted cash obtained from fentanyl trade into crypto and transferred it between the USA and Mexico were officially added to the sanctions list.
Sinaloa Cartel and Cryptocurrency Flow
The Sinaloa Cartel, a major drug organization based in Mexico, has been active in international criminal activities for many years. It was revealed that the branch of this structure called Los Chapitos used stablecoin and decentralized exchange infrastructures to bypass the traditional banking system.
According to OFAC sources, Armando de Jesus Ojeda Aviles stood out as the person responsible for the group’s technological money transfers. This person collected street-level cash flow through couriers and middlemen in the US and converted it into crypto by deploying decentralized finance tools.
Additionally, it was determined that Jesus Alonso Aispuro Felix played a critical role in high-volume transfers within the team and Rodrigo Alarcon Palomares managed cash collection operations across the country. Palomares was indicted by a grand jury in the US state of Colorado in April 2024 on three separate charges of money laundering.
Mini dictionary: What is OFAC?
Mini dictionary: OFAC (Office of Foreign Assets Control), affiliated with the US Department of Treasury, lists individuals and institutions that threaten national security within the scope of terrorism, drug trafficking, organized crime or money laundering; The financial relations of those on this list with the USA are completely frozen.
Role and Explanations of Chainalysis
Blockchain analysis company Chainalysis cooperated with OFAC by examining money movements on the chain and shared with the public that it integrated all cryptocurrency addresses included in the sanctions list into its tracking system. In the company’s message published on X (formerly Twitter), it was emphasized that the Sinaloa Cartel started a new era in cross-border transfers using stablecoins.
Chainalysis confirmed that OFAC today sanctioned a Sinaloa Cartel-owned cryptocurrency exchange network to transfer fentanyl proceeds between the United States and Mexico. In the company’s statement, it was stated that stablecoins stand out as the main transfer tool.
Chainalysis officials also said that they have tagged these addresses in their systems and will continue to monitor them regularly for suspicious transactions.
Transition Cycle from Cash to Digital Asset with Cryptocurrency
The method used by the cartel is to manually collect physical cash in various US cities and deliver it to the hands of intermediaries via couriers; It then involved converting it into stablecoin purchases through serial transactions. These digital assets were swapped on decentralized exchanges, transferred to central platforms, and removed from the system in a “cleared” form.
It was emphasized that stablecoins are preferred among international criminal organizations due to their low price volatility and rapid transfers. In the statement made by the US Treasury Department, it was pointed out that these habits in the cryptocurrency ecosystem pose an increasing financial threat.
The latest wave of sanctions was viewed as just one part of a broader package of countermeasures aimed at reducing the cartel’s financial operating capacity. In this way, it is stated that crypto trading channels can be monitored much more transparently compared to traditional banking.
The US Treasury Department stated that they are particularly concerned about the use of stablecoins or decentralized platforms by cartels as a new generation money laundering tool, and that such networks will continue to be identified and monitored.
