US Treasury Softens Stance on Crypto Mixers: Acknowledges Privacy Needs While Cracking Down on Money Laundering

According to a report by The Block, the US Treasury Department submitted a 32-page report to Congress this month, publicly acknowledging for the first time that while cryptocurrency mixers are often used for illicit money laundering, they also serve legitimate privacy protection purposes. The report points out that some users utilize mixing services to protect sensitive financial information on public blockchains, such as personal asset records, corporate payment trails, and charitable donation activities. "Legitimate digital asset users can maintain financial privacy in public chain transactions through mixing services," the report added, noting that if service providers comply with regulatory requirements, they can provide law enforcement agencies with critical data, including customer identities and off-chain transaction paths.

This position is a stark contrast to the US Treasury Department's previous hardline stance. In 2022, the department imposed sanctions on the mixing platform Tornado Cash; in 2023, it further designated several international mixing services as money laundering hubs. However, the Treasury Department also emphasized that mixers remain a primary tool for laundering criminal funds. Data shows that between January 2024 and September 2025, North Korean hacker groups stole and laundered at least $2.8 billion in digital assets through mixers.

To this end, the Treasury Department reiterated that any entity providing mixing services that involves the transfer of funds must register with the Financial Crimes Enforcement Network (FinCEN) as a Money Services Business (MSB) and fulfill anti-money laundering obligations. This move aims to balance privacy rights with financial security, promoting the industry towards transparent regulation.