U.S. Treasury Department: Not banning coin mixers! Looking for a way to coexist privacy and compliance

The U.S. Department of Justice has successively filed lawsuits against the founders of currency mixers Tornado Cash and Samourai Wallet, and last year the Financial Crimes Enforcement Agency (FinCEN) under the Treasury Department proposed that currency mixers The proposal, which has been classified as a "major money laundering issue" by the Federal Government, requires virtual asset service providers to report any transactions involving currency mixing services to the agency.

Various measures have made many people in the industry worry that the United States will adopt more stringent bans on cryptocurrency mixing services.

Treasury Department: Hopes to work with industry to develop tools that enhance privacy without supporting illegal activities

However, according to CoinDesk, Brian Nelson, the Treasury Department’s undersecretary for terrorism and financial intelligence, clarified , this proposal is not a ban on mixers, but more accurately, it is a proposed rule aimed at increasing transparency.

He expressed understanding of crypto users’ desire for financial privacy, but suggested that the industry and the Treasury Department should work together to find ways to enhance privacy while avoiding terrorist financing.

“From our perspective, we believe there is a difference between obfuscation technologies and enhanced anonymity services that support privacy protection – and we certainly fully recognize that in the context of public blockchains… People will want to have a certain level of privacy. In that spirit, we want to work closely with the industry to identify and develop tools that can improve privacy protection," Nelson added. Most mixers are not actually created to enhance privacy, but to circumvent anti-money laundering (AML) and KYC reporting requirements, making them "very attractive" to bad actors. He said: Not everyone needs to know who you are dealing with, but people and VASPs need to know that they are not "inadvertently" funding Hamas or North Korea's weapons programs.

Members of Congress: A bill to combat coin mixers will be introduced

But before the boundary between privacy and illegal financial flows is thoroughly discussed. Democratic Congressman Sean Casten announced earlier this month that he would introduce a bill aimed at combating money laundering through cryptocurrency mixing services, while expressing his concerns about the overseas-issued stablecoin USDT, especially regarding reports that it Support Russia's war and use it to fund Hamas.

The bill is supported by Reps. Brad Sherman (D-Calif.), Emanuel Cleaver (D-Missouri) and Bill Foster (D-Illinois). Casten said: Until we conduct an in-depth study of these tools and establish a reliable audit method, we should assume that these coin mixers are money laundering tools.

Although the statement from the Deputy Minister of Finance expressed that he understands users’ desire for privacy, there seems to be no substantive action at present. U.S. authorities appear to be continuing to intensify their crackdown on cryptocurrency mixers, accusing these privacy services of providing tools for illegal financial activities.

It remains to be seen whether the future standardization and implementation of currency mixing services can be carried out under a legal framework and industry cooperation.

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