Mexico’s Drug Cartels Are Moving Deeper Into Crypto With Hidden Mining Farms: Report

Mexican authorities have seized a suspected cryptocurrency mining operation in the mountains of Puebla, where investigators are examining whether virtual assets generated at the site were used to disguise money connected to illegal activity.

The operation in Tlaola, in Puebla's Sierra Norte region, was carried out jointly by Mexico's federal attorney general's office, the Navy and state security authorities. Officers found a pedestal transformer, about 80 medium-voltage terminals, eight satellite internet antennas and nearly 300 specialized computing units operating at the property, the Puebla state government said.

Authorities said the property and equipment were placed in government custody while investigators determine whether cryptocurrency generated by the operation was used to give an appearance of legitimacy to funds connected to illicit activities. No specific cartel has been publicly identified as the owner or operator of the Tlaola facility.

The discovery nevertheless comes as Mexican criminal organizations make increasing use of cryptocurrency to move money, purchase supplies and launder drug proceeds. The U.S. Treasury Department's 2026 National Money Laundering Risk Assessment says both the Sinaloa Cartel and the Jalisco New Generation Cartel, or CJNG, use digital assets to purchase precursor chemicals, launder and repatriate funds and carry out other transactions.

U.S. authorities have documented the trend for several years. The Financial Crimes Enforcement Network said in a 2024 advisory that Mexico-based transnational criminal organizations were increasingly buying fentanyl precursor chemicals and manufacturing equipment from China-based suppliers using bitcoin, ether, monero, tether and other virtual currencies.

The Tlaola case potentially adds another dimension to that use of digital assets because investigators are examining a facility capable of generating cryptocurrency itself.

David Saucedo, a Mexico-based security analyst, told Reuters that an operation of that type would require technical expertise and substantial financial backing. "Drug cartels appear to have reached a new level of sophistication," he said.

Electricity is a key part of the investigation because cryptocurrency mining requires substantial power to operate and cool specialized computing equipment. Authorities are examining whether the Tlaola facility was illegally drawing electricity from infrastructure connected to a nearby hydroelectric system.

The cost of electricity can determine whether a mining operation is profitable. The Cambridge Bitcoin Electricity Consumption Index calculates the estimated marginal electricity cost of producing bitcoin using network electricity consumption, mining rewards and an assumed electricity price. Cambridge added its Bitcoin production cost index in January 2026.

The Tlaola facility was the fourth suspected crypto farm uncovered in the area since early 2025. Three similar operations were previously discovered near the hydroelectric facility in northern Puebla, and authorities are working with neighboring states as they investigate whether other sites are operating in the region.

The investigation comes as illicit cryptocurrency activity has risen sharply worldwide. Blockchain analytics firm Chainalysis estimates that addresses identified as illicit received at least $154 billion in cryptocurrency during 2025, up 162% from the previous year.

Much of that increase was driven by sanctioned entities, which received 694% more cryptocurrency than a year earlier. Chainalysis cautioned that its $154 billion estimate is a lower-bound figure that can increase as additional illicit addresses are identified. Despite the increase, transactions linked to illicit addresses remained below 1% of attributed cryptocurrency transaction volume.

The U.S. has also stepped up efforts to disrupt financial channels used by Mexican drug trafficking organizations. In March, FinCEN expanded a geographic targeting order requiring certain money-services businesses along the southwestern U.S. border to report additional transactions as part of efforts to identify cartel money laundering.

In Puebla, investigators have not announced arrests or publicly identified who financed or operated the Tlaola mining facility. Mexico's federal attorney general's office declined to discuss the case, citing the continuing investigation.