Treasury Secretary Bessent sends brutal warning to drug cartels

By TheStreet Roundtable

about 1 hour ago

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The Trump administration’s January 20, 2025 executive order designating major cartels as Foreign Terrorist Organizations is now shaping how the United States approaches financial crime tied to narcotics trafficking.

On May 20, the U.S. Department of the Treasury announced sanctions against more than a dozen individuals and entities linked to two Sinaloa Cartel-connected money laundering operations accused of converting fentanyl proceeds into cryptocurrency.

Treasury goes after cartel money networks

The Treasury Department’s Office of Foreign Assets Control (OFAC) said the sanctions targeted two separate financial networks linked to the Sinaloa Cartel and its fentanyl trafficking operations.

Treasury Secretary Scott Bessent framed the crackdown as part of a broader national security effort against cartel-linked financial activity.

“As President Trump has made clear, this Administration will not allow narco-terrorists to flood our borders with poison,” Bessent said. “Treasury will continue to target terrorist cartels and their fentanyl trafficking networks to protect our communities and Keep America Safe.”

The sanctions were coordinated through Homeland Security Task Forces, the Drug Enforcement Administration, Mexico’s financial intelligence unit and Treasury investigators.

The cartel is now being framed by U.S. authorities as both a narcotics and national security threat following its FTO designation earlier this year.

How the cartel cash-to-crypto pipeline worked

According to Treasury, Armando de Jesus Ojeda Aviles led one laundering network tied to the Los Chapitos faction of the Sinaloa Cartel.

U.S. authorities said Ojeda Aviles coordinated the collection of bulk cash proceeds in the United States generated from fentanyl and other narcotics sales before facilitating their conversion into cryptocurrency for transfer to cartel operators in Mexico.

Jesus Alonso Aispuro Felix allegedly acted as the network’s chief money broker, overseeing large digital currency transfers.

Rodrigo Alarcon Palomares handled money pickups in the United States and was indicted by a Colorado federal grand jury in April 2024 on charges tied to laundering drug proceeds through cryptocurrency.

Treasury also sanctioned Alfredo Orozco Romero, described as a security adviser and debt collector tied to cocaine shipments, alongside family-linked businesses allegedly used by the network.

A second laundering operation allegedly run by Jesus Gonzalez Penuelas involved associates responsible for drug trafficking, bulk cash movement and laundering tied to methamphetamine, heroin, cocaine and fentanyl operations.

Treasury identified Castulo Bojorquez Chaparro, Fredi Ismael Garcia Sandoval, Luis Arnulfo Moreno Zamora, Baltazar Saenz Aguilar and Noe de Jesus Castro Rocha as associates linked to the network.

Treasury said these networks helped turn fentanyl cash into digital transfers routed across the border.

Fentanyl, sanctions, and a long cartel crypto trail

The sanctions build on years of U.S. enforcement actions targeting crypto-linked cartel financing.

The Sinaloa Cartel was designated under the Kingpin Act in 2009, sanctioned again in 2021 and formally labeled both a Foreign Terrorist Organization and Specially Designated Global Terrorist organization in February 2025.

Following Joaquin “El Chapo” Guzman’s capture, the Los Chapitos faction consolidated control over major fentanyl trafficking operations through precursor chemical procurement and secret laboratories in Sinaloa, according to Treasury.

Since September 2024, turf wars in the region have killed more than 600 people.

U.S. authorities have repeatedly linked cartel laundering operations to cryptocurrency. In September 2023, OFAC sanctioned Mario Alberto Jimenez Castro for using digital assets and wire transfers to move fentanyl proceeds.

The Department of Justice also announced indictments in June 2024 against Los Angeles-based associates accused of laundering more than $50 million in cartel proceeds.

Blockchain intelligence firm Chainalysis has warned that cartels increasingly rely on crypto rails to move illicit proceeds globally, while investigators continue labeling associated wallet addresses to track fund flows.