On 25 June 2025, the US Treasury’s Financial Crimes Enforcement Network (FinCEN) took unprecedented action under Section 9714 of the FEND Off Fentanyl Act, which builds on the earlier Fentanyl Sanctions Act, designating three Mexico-based financial institutions: CIBanco, Intercam Banco, and Vector Casa de Bolsa, as “primary money laundering concerns.”
This marks the first-ever use of these new authorities, effectively cutting off these institutions from the US financial system and banning any US financial institution from processing transactions to or from them, including transactions involving any account or digital asset address they control.
According to FinCEN, the institutions facilitated the laundering of millions of dollars in fentanyl trafficking proceeds on behalf of cartels including CJNG, the Gulf Cartel, Beltran-Leyva, and the Sinaloa Cartel. The proceeds funded precursor chemical purchases from Chinese suppliers. Examples include:
- a CIBanco employee knowingly creating an account to launder $10 million for a Gulf Cartel member;
- Intercam Banco executives holding meetings with CJNG representatives to build wire-transfer laundering schemes to China;
- Vector Casa de Bolsa linked to more than $2 million in laundered funds for the Sinaloa Cartel.
Crypto’s role in cartel money movement
Stablecoins have become the currency of choice for these networks, thanks to their speed, liquidity, and perceived price stability. Stablecoins now account for a significant share of illicit crypto transaction volume, with drug trafficking networks exploiting weak AML controls across loosely regulated OTC brokers and peer-to-peer platforms. These trends reinforce the urgent need for firms to strengthen crypto due diligence and monitor high-risk transactions involving stablecoin flows.
In Q1 2025 alone, stablecoins accounted for an estimated 60% of illicit crypto transaction volume, highlighting the urgent need for stronger stablecoin oversight under measures like the GENIUS Act.
National security stakes
This enforcement wave fits within the wider US counter-narcotics crackdown. In January, the Trump administration designated multiple Mexican cartels as Foreign Terrorist Organizations (FTOs) and Specially Designated Global Terrorists (SDGTs), heightening the compliance stakes for businesses and banks operating across borders.
The Treasury’s latest move, which also blocks convertible virtual currency addresses tied to the three designated institutions, shows a growing willingness to treat crypto wallets as financial infrastructure subject to sanctions controls. That aligns with a broader trend of placing transnational criminal cartels on par with sanctioned terrorist groups.
What’s next?
US financial institutions, virtual asset service providers, and any firms with cross-border exposure to Mexico should immediately review their sanctions screening and transaction monitoring controls. In particular, these measures underline the need to map relationships with correspondent banks and OTC crypto brokers who may indirectly interact with Mexican financial players.
Importantly, US venture capital firms must also take note: from 1 January 2026, new AML rules will force VCs to carry out due diligence and KYC checks, closing historic gaps in risk oversight.
The convergence of crypto, cartels, and Chinese precursor suppliers is a textbook example of financial crime evolving faster than traditional controls. FinCEN’s action may well set the tone for future designations explicitly covering blockchain-based rails and exchanges, demanding sharper AML strategies across the compliance sector.
