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The U.S. Treasury acknowledged crypto mixers can serve legitimate privacy purposes.
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A new report recommends a “hold law” allowing institutions to freeze suspicious assets.
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Treasury data shows $1.6 billion from mixers flowed into bridges since 2020.
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The findings follow shifting policy after Tornado Cash sanctions were lifted.
Balancing Privacy and Enforcement
The U.S. Department of the Treasury has acknowledged that cryptocurrency mixers can have legitimate uses for financial privacy, marking a shift from earlier enforcement actions.
In a report submitted to Congress, the agency stated that individuals may use mixing services to protect sensitive information about personal finances, business transactions, or charitable donations when using public blockchains.
However, Treasury emphasized that mixers remain heavily used in laundering operations connected to cybercrime and state-sponsored hacking groups.
New Legislative Recommendations
The report proposes that Congress establish a digital asset-specific “hold law” allowing financial institutions to temporarily freeze suspicious funds while investigations are conducted.
Treasury also urged lawmakers to clarify which decentralized finance participants should be subject to anti-money-laundering rules.
The findings come after legal and political debate surrounding the sanctioning of the Tornado Cash mixer, which courts later ruled exceeded regulatory authority.
