The United States Department of the Treasury, through its Office of Foreign Assets Control (OFAC), sanctioned a crypto wallet allegedly connected to a major international crime syndicate on Tuesday. The wallet, associated with Mexican national Mario Alberto Jimenez Castro, is believed to be part of a money laundering operation supporting the Sinaloa Cartel's illicit fentanyl trade in the United States.
Jimenez Castro reportedly operates under a Chapitos deputy, using virtual currency and wire transfers to move proceeds from illicit fentanyl sales in the United States to Sinaloa Cartel leaders in Mexico. He also directed U.S.-based couriers to deposit cash into various virtual currency wallets for direct payment to the Chapitos and for reinvestment in fentanyl production.
The Ethereum wallet linked to Castro had a balance of approximately 0.018 Ether (ETH) — $28.22 — at the time of OFAC's announcement. The latest activity recorded on this wallet was more than 200 days ago. The Treasury stated that these sanctions were part of their response to the "illicit fentanyl trafficking" crisis affecting the United States.
Brian Nelson, Under Secretary of the Treasury for Terrorism and Financial Intelligence, emphasized the administration's commitment to combating criminal enterprises threatening international security and contributing to the opioid crisis in the US. He stressed that they would continue to target such operations relentlessly.
This action follows previous sanctions by OFAC against individuals linked to North Korea’s Lazarus Group and the addition of crypto mixer Tornado Cash to its list of Specially Designated Nationals in August 2022 due to alleged money laundering and sanctions violations. The decision faced criticism from industry leaders and policymakers, leading to a lawsuit against Treasury backed by six individuals from crypto exchange Coinbase (NASDAQ:COIN). However, a judge largely sided with the U.S. government in August.
The recent sanctions against Jimenez Castro and his Ethereum wallet underlines the Treasury's ongoing efforts to disrupt illicit financial activities, particularly those related to the opioid crisis. It also showcases the challenges faced by authorities in tracking and controlling transactions made through cryptocurrencies, which have become increasingly attractive for illicit activities due to their anonymity and decentralized operations.
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