US Justice Department sanctioned five people and a Bitcoin address tied to Sinaloa Cartel

Updated: 15 April 2023

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A division of the US Treasury Department known as the Office of Foreign Assets Control (OFAC) announced that it has taken action against five individuals. The people in question include citizens of Guatemala and the People’s Republic of China. OFAC decided to sanction the five, as well as two companies based in China, and even a Bitcoin wallet address supposedly belonging to one of the individuals.

The OFAC made a move because all of the sanctioned entities supposedly played some role in supplying drug cartels with various ingredients used for opioid creation.

Treasury's OFAC just added another BTC address to its sanctions list, coinciding with a DOJ announcement of action against the Sinaloa Cartel https://t.co/5Dtx1KC2cU

— @nikhileshde@journa.host (@nikhileshde) April 14, 2023

How did the operation work and who was involved?

The Office revealed the names of the sanctioned individuals and companies, listing Yao Huatao, Wu Yonghao, Wu Yaqin, Wang Hongfei, as well as Ana Gabriela Rubio Zea. The two Chinese companies that were also sanctioned include Suzhuo Xiaoli Pharmatech Co., Ltd. and Wuhan Shuokang Biological Technology Co., Ltd.

According to the announcement, Yao Huatao, from China and the owner of Wuhan Shuokang Biological Technology Company, was overseeing the sale of fentanyl precursors. It further says that Wu Yaqin and Wu Yonghao were working as sales representatives for the illicit operation.

OFAC further claims that a broker from Guatemala, Ana Gabriela Rubio Zea, was responsible for buying the precursors for the drug cartels based in Mexico. Finally, Suzhuo Xiaoli Pharmatech Company was charged with shipping the precursors to Mexico. Unfortunately, the operation also involved the usage of cryptocurrency, which is damaging for the reputation of asset class that is making a strong push to reach global acceptance. According to OFAC, the fifth sanctioned individual, Wang Hongfei, was the owner of a crypto wallet, and he used it to get payments in Bitcoin on behalf of the Chinese company.

Criminals have been misusing cryptocurrencies in their illicit operations for over a decade, even before cryptocurrencies became a global phenomenon. Since wallets are very easy to set up, criminals have been using Bitcoin and other assets to make payments and receive funds anonymously.

A war on drugs continues

The Office of Foreign Assets Control has accused these five individuals and two companies of providing precursor chemicals used in the production of fentanyl to the drug cartels. These and similar China-based firms have been identified as a primary source of precursors that are used for making drugs. Others would then smuggle the drugs into the US and sell them on American streets.

Attorney General Merrick Garland confirms these sanctions are tied to the DOJ's ongoing effort to tamp down on fentanyl trafficking

— @nikhileshde@journa.host (@nikhileshde) April 14, 2023

With the opioid epidemic currently plaguing the US, the country has made it a priority to stop the flow of drugs into the US. One of the most efficient ways to do that is to prevent the flow of precursors into Mexico. The country has deemed it necessary, as the Center for Disease Control has reported that 67% (71,941) of the total overdose deaths in the country (107,375) in a 12-month period running through January 2022 was caused by fentanyl and similar synthetic opioids.

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