On May 20, 2026, the U.S. Treasury's OFAC sanctioned over a dozen individuals and entities linked to the Sinaloa Cartel's Los Chapitos faction, targeting a money laundering network that converts fentanyl cash proceeds into cryptocurrency for cross-border transfer to Mexico. The network is led by Armando de Jesus Ojeda Aviles, who became the faction's chief money launderer after his predecessor was sanctioned in 2023. Key figures include Jesus Alonso Aispuro Felix, the chief money broker managing digital transfers, and Rodrigo Alarcon Palomares, who facilitated cash pickups in the U.S. and was indicted in Colorado in April 2024. On-chain analysis by Chainalysis reveals a pattern where cash is converted to stablecoins via decentralized exchanges, then moved to centralized exchanges. The sanctions aim to disrupt the cartel's cash-to-crypto pipeline and curb fentanyl trafficking. Compliance implications for crypto exchanges include monitoring exposure to designated addresses.

Key facts

• OFAC sanctioned over a dozen individuals and entities linked to Sinaloa Cartel's Los Chapitos faction.
• The network converts fentanyl cash proceeds from U.S. drug sales into cryptocurrency for transfer to Mexico.
• Armando de Jesus Ojeda Aviles leads the laundering network, succeeding a sanctioned predecessor.
• On-chain analysis shows use of decentralized exchanges and stablecoins to move funds.
• The action aims to disrupt cartel financing and has compliance implications for crypto exchanges.