Mexican Cartel Exploits Blockchain's Transparency to Evade Investigators

The Mexican cartel CJNG has successfully exploited blockchain's promise of transparency to evade investigators, using technical tricks to hide ownership behind a veil of anonymity.

CJNG, led by Nemesio Oseguera Cervantes, also known as El Mencho, was designated a Foreign Terrorist Organization by the US in early 2025 and had a $15 million reward offered for his capture. However, despite this pressure, cryptocurrency flows continued to grow.

The cartel used Tether, a stablecoin pegged to the US dollar, to pay Chinese chemical suppliers for precursor chemicals needed to make fentanyl, with payments growing from $4.3 million in 2022 to $26 million in 2023, a 600% increase. This growth in cryptocurrency payments was facilitated by China's relaxed regulations on cryptocurrency use.

CJNG used various techniques to evade investigators, including mixers and chain-hopping, which break the trail of transactions by moving money through multiple wallets or blockchains. The cartel also utilized decentralized alternatives that cannot be shut down by authorities.