The US Department of the Treasury’s Office of Foreign Assets Control (OFAC) labeled six Ethereum addresses as part of its crackdown on a Sinaloa Cartel-affiliated money laundering scheme. These addresses were added to OFAC’s Specially Designated Nationals list, blocking them from transactions with US entities as part of sanctions against individuals and entities linked to two cartel financial networks.
One of the networks, led by Armando de Jesus Ojeda Aviles, reportedly collected large sums of cash in the US from fentanyl and other drug sales. The funds were then allegedly converted into cryptocurrency and transferred back to the cartel in Mexico, demonstrating how illicit actors blend cash couriers, front companies, and digital assets to obscure financial flows.
This move underlines the growing use of blockchain technology in cartel money laundering, complicating compliance efforts for cryptocurrency exchanges, wallet providers, and virtual asset service firms that must screen for sanctioned addresses. Although OFAC did not specify which crypto platforms facilitated transactions from these addresses, the sanctions broaden the scope of oversight for firms handling Ethereum transactions.
Money laundering through cryptocurrency has recently gained attention due to high-profile hacks. For instance, attackers laundered most of the $1.4 billion stolen in the Bybit hack through THORChain by swapping Ether for Bitcoin. Similarly, those behind the $293 million Kelp DAO hack used the same protocol to convert stolen Ether into Bitcoin, highlighting the challenges decentralized finance (DeFi) platforms face in preventing illicit activity.