US OFAC Announces Sanctions on Two Cryptocurrency Money Laundering Networks Linked to Drug Cartels
The US OFAC has announced sanctions on two money laundering networks associated with the Sinaloa drug cartel, involving over a dozen individuals and entities.
These networks are responsible for collecting cash from the sale of drugs such as fentanyl within the US, converting it into cryptocurrency, and then transferring it to high-ranking members of the "Los Chapitos" faction in Mexico (controlled by Ivan and Alfredo Guzman Salazar, sons of "El Chapo" Guzman).
Sanctioned individuals include Armando de Jesus Ojeda Aviles and Jesus Gonzalez Penuelas, with related assets being frozen and US citizens and businesses prohibited from engaging in transactions with them.
Source: Public Information
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OFAC has previously imposed sanctions on the financial networks of the Sinaloa cartel multiple times. This latest action focuses on disrupting cash-to-cryptocurrency conversion channels as part of the 2024-2025 "Fentanyl Sanctions" initiative, having already cut off several money laundering groups using USDT and BTC.
In terms of capital flow, the US Treasury, through OFAC and law enforcement resources, is leaning towards KYC at cryptocurrency exchanges and on-chain tracking, aiming to sever the rapid conversion pipeline from drug cash to crypto assets, forcing money laundering networks to shift to more expensive and traceable traditional channels, while increasing compliance costs for global exchanges.
Similar to the continuous crackdown by OFAC on the Lazarus Group and various Latin American money laundering networks from 2022 to 2025, the current cross-border money laundering industry is transitioning from traditional underground banking to crypto channels, now facing tighter regulation. Compliant exchanges and on-chain analytics companies are expanding service demand as a result.
Essentially, this represents a regulatory shift: cryptocurrency money laundering sanctions are transferring pricing power from anonymous transfers to compliant tracking infrastructures. The mechanism involves OFAC combining entity lists with technical tracking to significantly increase the friction costs of money laundering, forcing criminal networks to move from "fast and hidden" to "slow and expensive," while accelerating the crypto industry's evolution from gray areas to strong regulatory compliance.
ABAB News · Cognitive Law
The harder cash is to hide, the sooner crypto becomes a money laundering channel, and the sooner it gets precisely cut off.
Wherever regulation follows, the benefits of anonymity disappear, and compliance becomes truly valuable.
No matter how high drug profits are, once sanctions are imposed, they turn into frozen assets; compliance barriers are always the ultimate moat.