The reported killing of Nemesio Rubén Oseguera Cervantes, known as El Mencho, has triggered widespread violence across Mexico. He was one of the world’s most wanted drug lords and the leader of the powerful Jalisco New Generation Cartel (CJNG). According to official information, he was killed on Sunday during a military operation.
Following his death, unrest spread quickly. According to the BBC, at least 20 Mexican states experienced disturbances. Cartel members reportedly blocked highways, set vehicles on fire, and torched businesses. Security forces were deployed in multiple regions to control the situation.
The CJNG was formed in 2009 and grew into one of Mexico’s most violent criminal organizations. The US Department of State has assessed that the cartel developed one of the highest capacities in Mexico for trafficking illegal drugs. In recent years, it also expanded into fentanyl trafficking into the United States. On February 20, 2025, the United States designated CJNG as a Foreign Terrorist Organization under Section 219 of the Immigration and Nationality Act. Before his death, a $15 million reward had been offered for information leading to El Mencho’s capture or conviction.
While the immediate impact of his killing was visible in violent street reactions, authorities have also highlighted the cartel’s complex financial operations, particularly its use of cryptocurrency.
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Regulators Expose Cartel Cryptocurrency Use
Cryptocurrencies such as Bitcoin (BTC) and Tether (USDT) are widely used for legal payments and investments. They are not inherently illegal. However, law enforcement agencies have documented instances where Mexican criminal networks used digital assets for illicit transactions.
As early as 2020, Reuters reported that US and Mexican authorities observed increasing Bitcoin use among major drug trafficking groups, including CJNG and the Sinaloa Cartel. Officials indicated that cryptocurrency was being used to launder drug proceeds and move funds across borders.
In 2024, the Financial Crimes Enforcement Network (FinCEN) stated that Mexico-based transnational criminal organizations were using virtual currencies such as Bitcoin, Ethereum, Monero, and Tether to purchase fentanyl precursor chemicals and equipment from suppliers in China. These precursor chemicals are used to manufacture synthetic opioids.
A March 2025 report by Chainalysis found that suspected China-based chemical traders received more than $37.8 million in cryptocurrency between 2018 and 2023. Major Mexican cartels, including CJNG, were identified as buyers of these precursors used to produce synthetic drugs.
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Money Laundering Networks and Digital Tactics
Research from TRM Labs revealed that some chemical suppliers advertised directly on darknet markets and messaging apps, accepting cryptocurrency in exchange for shipments to Mexico. Once payments were made, funds were moved through complex transaction patterns designed to hide their origin.
These methods included peel chains, layering, and cross-chain swaps. Peel chains involve breaking large sums into smaller transfers. Layering moves funds through multiple wallets to make tracking difficult. Cross-chain swaps convert one cryptocurrency into another across different blockchains. After these steps, funds were often cashed out through exchanges or international intermediaries.
In August 2025, FinCEN also highlighted that CJNG, the Sinaloa Cartel, the Gulf Cartel, and other Mexico-based criminal organizations were using Chinese money laundering networks. Chainalysis reported that these networks accounted for approximately 20% of known cryptocurrency-related money laundering activity in 2025.
In a separate case, the US Attorney’s Office for the Southern District of New York announced indictments against Paul Campo and Robert Sensi. According to the official press release, the scheme involved laundering approximately $12 million in narcotics proceeds, converting about $750,000 into cryptocurrency, and making payments connected to approximately 220 kilograms of illegal drugs expected to generate around $5 million from distribution and sale.
El Mencho’s killing marks a major event in Mexico’s fight against organized crime. At the same time, regulatory findings show that cartel financial systems remain complex, cross-border, and technologically advanced, extending far beyond any single individual.