One of the world’s most wanted drug lords has died. Nemesio Rubén Oseguera Cervantes, known as “El Mencho,” was murdered on Sunday. His death sparked a wave of violence in several Mexican states.
Beyond the impact on security, the financial management of cartels is also attracting attention. In recent years, regulators and researchers have documented how Mexican criminal networks are incorporating cryptocurrencies into their operations.
Who is El Mencho?
El Mencho was one of Mexico’s most wanted fugitives and the leader of the Jalisco New Generation (CJNG) cartel. According to the U.S. Department of State, the CJNG was formed in 2009. It has since evolved into one of Mexico’s most violent drug cartels.
“Mexico is rated as having the highest capacity for trafficking cocaine, heroin, and methamphetamines, and in recent years has included trafficking fentanyl to the United States,” the text reads.
On February 20, 2025, the United States formally designated the cartel as a foreign terrorist organization under Section 219 of the Immigration and Nationality Act.
In addition, the U.S. State Department had offered a $15 million reward for information leading to El Mencho’s arrest or conviction. He was killed during a military operation on Sunday.
After his death, unrest spread throughout the country. According to the BBC, unrest broke out in at least 20 states, with cartel members blocking roads and setting vehicles and businesses on fire.
Although the direct effects played out on the streets, historical data shows that the CJNG’s influence extended beyond territorial control.
Over the past few years, law enforcement authorities have tracked the cartel’s increasingly sophisticated financial infrastructure. This includes the use of digital assets to move and launder funds across borders.
Virtual currency and cartel finance
Cryptocurrencies such as Bitcoin (BTC) and Tether (USDT) are not inherently illegal. These are widely used for legitimate investments, payments, and financial innovation.
However, regulators and law enforcement agencies have identified instances where these digital assets have been used in transactions related to illegal activities.
Reuters reported that in early 2020, U.S. and Mexican authorities observed an increase in the use of Bitcoin for money laundering among major drug trafficking organizations, including the CJNG and the Sinaloa cartel.
In 2024, the U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN) announced that transnational criminal organizations based in Mexico were using cryptocurrencies such as Bitcoin, Ethereum, Monero, and Tether to purchase fentanyl precursor chemicals and equipment from Chinese suppliers.
A March 2025 report by Chainalysis found that a suspected China-based chemical trader received over $37.8 million in cryptocurrencies between 2018 and 2023. Major Mexican cartels, including CJNG, were identified as purchasers of these precursors used to manufacture synthetic opioids.
“Blockchain analysis reveals that precursor chemical suppliers advertise directly on darknet markets and messaging apps, accepting digital assets in exchange for chemicals shipped to Mexico. Once paid, crypto funds are laundered through complex transaction patterns such as peel chains, layering, and cross-chain swaps, and often cashed out through Chinese exchanges and international mules,” TRM Labs revealed.
In August 2025, FinCEN also highlighted that the CJNG, the Sinaloa Cartel, the Gulf Cartel, and other Mexico-based transnational criminal organizations are using the Chinese Money Laundering Network (CMLN) to launder illicit proceeds.
Notably, Chainalysis reported that CMLN currently plays a dominant role in crypto-related money laundering. In 2025, these networks accounted for approximately 20% of known crypto money laundering activity.
As activity expands, so too does regulatory focus. Former DEA agents Paul Campo and Robert Cenci were charged with conspiring to provide material support to CJNG, according to the U.S. Attorney’s Office for the Southern District of New York.
“As part of the scheme, CAMPO and SENSI agreed to launder approximately $12 million in CJNG drug proceeds, laundered approximately $750,000 by converting the cash into cryptocurrency, and provided a payment for approximately 220 kilograms of cocaine with the understanding that the payment would result in the distribution and sale of approximately $5 million worth of drugs. CAMPO and SENSI agreed to (i) “They will receive a portion of the drug proceeds directly as profits and (ii) receive additional fees for laundering the balance of drug proceeds,” the press release states.
El Mencho’s death therefore marks an important moment in Mexico’s fight against organized crime. However, the financial systems that support major cartels remain complex, cross-border, technologically adaptive, and reach far beyond individuals.
