The US Treasury’s Office of Foreign Assets Control (OFAC) has announced new sanctions targeting the Sinaloa Cartel’s money laundering operations involving cryptocurrency. In a sweeping decision made public in May 2026, more than 12 individuals and entities accused of converting fentanyl trafficking proceeds into crypto and transferring them between the US and Mexico have been officially added to the sanctions list.
Sinaloa Cartel’s crypto shift
The Sinaloa Cartel, a major Mexico-based drug trafficking organization, has long played a central role in international crime. Recent investigations revealed that the cartel’s “Los Chapitos” faction has adopted stablecoins and decentralized exchange infrastructures to bypass conventional banking controls and streamline global cash movement.
According to OFAC, Armando de Jesus Ojeda Aviles emerged as the group’s main coordinator for technological money transfers. He reportedly gathered street-level cash in the US through couriers and intermediaries, then employed decentralized finance tools to convert these funds into cryptocurrency.
Further findings identified Jesus Alonso Aispuro Felix as handling large-scale crypto transfers and Rodrigo Alarcon Palomares as orchestrating cash collection operations nationwide. In April 2024, a grand jury in Colorado indicted Palomares on three separate money laundering charges tied to these activities.
What is OFAC?
Mini glossary: The Office of Foreign Assets Control (OFAC) is a US Treasury agency that places individuals and entities involved in terrorism, drug trafficking, organized crime, or money laundering on a sanctions list if they’re deemed a threat to US national security. Once listed, their financial dealings with the US are completely frozen.
Chainalysis’ tracking and statements
Blockchain analytics firm Chainalysis collaborated with OFAC by tracing on-chain fund movements and has incorporated the sanctioned crypto addresses into its own monitoring systems. Their public statement on X (formerly Twitter) highlighted that the Sinaloa Cartel set a new precedent by using stablecoins to enable cross-border financial flows.
Chainalysis confirmed that OFAC has today sanctioned a network linked to the Sinaloa Cartel, which exchanged fentanyl profits for cryptocurrency to move funds between the US and Mexico. The company emphasized that stablecoins were consistently used as the primary transfer vehicle within this network.
Chainalysis officials stated that these addresses are now tagged in their databases, and that they will continue ongoing surveillance of suspicious activity involving them.
From cash to digital assets: A cartel cycle
The cartel’s laundering method involves manually collecting physical cash from various US cities, which is then handed to intermediaries via couriers. The next step sees the cash transformed, often through rapid transactions, into stablecoins. These digital assets then pass through decentralized exchanges, are swapped, and ultimately reach centralized platforms—effectively masking their criminal origins in the process.
Stablecoins are increasingly favored by global criminal syndicates due to minimal price volatility and rapid transaction speeds. The US Treasury has underscored that such behaviors in the crypto ecosystem now pose a growing financial threat.
The latest round of sanctions is seen as part of a broader effort to curtail the cartel’s ability to finance operations. Officials note that tracing transactions within crypto channels can, in fact, provide greater transparency compared to traditional banking routes.
The US Treasury expressed particular concern over the use of stablecoins and decentralized platforms as emerging money laundering tools among cartels, stressing their commitment to identifying and tracking these evolving networks.
