Authored by Zoltan Vardai via CoinTelegraph.com,
The US Department of the Treasury’s Office of Foreign Assets Control (OFAC) sanctioned six Ethereum addresses tied to a Sinaloa Cartel-linked money laundering network that allegedly converted drug proceeds into cryptocurrency.
OFAC added the addresses to its Specially Designated Nationals list (a US sanctions list of people, entities and assets subject to blocking restrictions) on Wednesday as part of sanctions against 11 individuals and two entities connected to two Sinaloa Cartel financial networks.
Treasury said one network, led by Armando de Jesus Ojeda Aviles, collected bulk cash in the US from fentanyl and other drug sales before allegedly converting the money into cryptocurrency for transfer to the cartel in Mexico.
The action highlights how cartel-linked money laundering networks are using digital assets alongside cash couriers and front businesses, raising sanctions compliance risks for crypto exchanges and other virtual asset service providers.
OFAC adds six new Ethereum addresses to sanctions list. Source: OFAC
The Sinaloa Cartel is allegedly using blockchain technology to launder its illicit fiat money proceeds, according to OFAC.
Cointelegraph contacted OFAC for more details surrounding the Sinaloa Cartel’s money laundering operations.
Treasury did not identify which crypto platforms or protocols were allegedly used by the network.
The listed Ethereum addresses, however, create sanctions exposure for exchanges, wallet providers and other crypto firms that screen blockchain transactions.
Looking at some of the biggest cryptocurrency hacks, attackers laundered the majority of the $1.4 billion stolen during the Bybit hack, or about $1.2 billion, through THORChain, swapping funds from Ether to Bitcoin, according to Bybit co-founder and CEO Ben Zhou.
Attackers behind the recent $293 million Kelp DAO hack also primarily used THORChain to swap the Ether for Bitcoin, generating about $910,000 in fee revenue for the protocol, Cointelegraph reported on April 23.