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HomeNewsCrypto Mixers Safe, Says Treasury: Emphasis on Transparency, Not Bans

Crypto Mixers Safe, Says Treasury: Emphasis on Transparency, Not Bans

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  • The U.S. Treasury is not banning crypto mixing services, focusing instead on transparency.
  • Most mixers bypass AML/KYC requirements, attracting bad actors like North Korea.

Brian Nelson, Under Secretary for Terrorism and Financial Intelligence, of the U.S. Department of the Treasury, made it clear that the agency is not looking to outlaw crypto mixing services during CoinDesk’s annual Consensus conference in Austin.

Given the Financial Crimes Enforcement Network’s (FinCEN) 2023 proposal to designate mixers as a “primary money laundering concern” and mandate that virtual asset service providers (VASPs) notify the agency of any cryptocurrency transactions involving mixing, this statement is timely.

Industry Concerns and Clarification

The FinCEN plan and the U.S. Department of Justice’s growing number of enforcement proceedings against mixing services like Tornado Cash and Samourai Wallet have many in the sector worried about a total prohibition on cryptocurrency mixing services in the United States. Nelson, however, categorically refuted these worries, saying:

“This [plan] is not a prohibition on mixers at the end of the day. Proposed regulation like this one is meant to promote openness.”

Although Nelson recognized that cryptocurrency consumers want financial anonymity, he also emphasized the need for business and Treasury cooperation to improve privacy without permitting terrorist funding.

“From our perspective, we believe that there is a difference between obfuscation and anonymity-enhancing services that support privacy; we of course totally recognize that, in the context of public blockchains, there would be a desire to have a certain degree of privacy,” Nelson added.

He underlined the need to collaborate closely with the sector to create privacy-enhancing products.

Misuse of Mixers 

Although anonymity is important, Nelson said that most mixers are increasingly being used to get around know-your-customer (KYC) and anti-money laundering (AML) reporting laws.

For bad actors, like North Korea, this abuse makes mixers “very attractive.” He emphasized that the goal is to make sure that individuals and VASPs are not “unwittingly” sponsoring terrorist activities, not to make all transactions accessible to everyone.

FBI’s Warning 

The FBI has cautioned against using unregistered cryptocurrency services in light of these worries, as ETHNews has previously reported, citing risks and AML/KYC compliance.

This supports the Treasury’s position regarding the value of openness and appropriate regulation in the bitcoin sector.

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Syofri
Syofri
Syofri is an active forex and crypto trader who has been diligently writing the latest news related to the digital asset sector for the past six years. He enjoys maintaining a balance between investing, playing music, and observing how the world evolves. Business Email: info@ethnews.com Phone: +49 160 92211628
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