May 29, 2024
Mexican Cartel's Crypto Connection: Tracking the Ethereum Wallet of "Kastor"
Policy & Regulation

Mexican Cartel’s Crypto Connection: Tracking the Ethereum Wallet of “Kastor”

The Office of Foreign Assets Control (OFAC) of the U.S. Treasury Department recently amended its sanctions list to include 10 people linked to the illegal drug trade, one of whom had an Ethereum wallet.

According to rumours, Mario Alberto Jimenez Castro (also known as “Kastor”), a 34-year-old Mexican citizen associated with the Sinaloa cartel, is the owner of the given Ethereum address. Although the wallet only has 0.017 ETH ($27) in it for now, transfers worth tens of thousands of dollars in stablecoins like Tether and USD Coin have been made possible thanks to it.

Inbound transactions from Coinbase and outbound transfers to Binance, two of the biggest exchanges in the world that were both sued by the Securities and Exchange Commission (SEC) in June, make up a significant portion of its transaction history. For instance, one transfer in October 2022 delivered 143,965 USDT to Binance.

The State Department’s website claims that Jiminez Castro is a “money launderer” who is in charge of a business that has assisted in utilizing cryptocurrencies to transport fentanyl revenues across the Mexican border, including from locations like “New York City, Boston, Denver, Nashville, Omaha, and Salt Lake City.”

“Since at least approximately August 2022, Jimenez Castro has directed individuals to pick up money from various traffickers in the U.S. and to then deposit that cash into various cryptocurrency wallets controlled by other high-level members of the organization,” the department explained.

Politicians in the United States, such as crypto sceptic Elizabeth Warren, have criticized virtual money for facilitating the fentanyl trade. Earlier this year, the White House referred to popular cryptocurrencies like Bitcoin and Ethereum as the “predominant funding mechanisms associated with fentanyl trafficking.”

Jiminez Castro now joins the list of crypto addresses linked to illegal activities that are authorized by the authorities. Other ones include those linked to the North Korean Lazarus Group and those connected to Tornado Cash and other crypto “mixers”—protocols and services that enhance transaction secrecy and are well-liked by money launderers.

Although it is still theoretically possible to utilize sanctioned addresses, doing so is against the law. As a result, cryptocurrency exchanges that deal with addresses on the blacklist risk legal repercussions from the government.

Image: Unsplash

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