US Treasury Report Sheds Light on Crypto Mixer Regulations

The US Treasury Department has published a report on the use of crypto mixers, which acknowledges that lawful users may turn to them to protect financial privacy. The report, submitted under Section 9 of the GENIUS Act, notes that mixers can be used for legitimate purposes such as shielding personal wealth and charitable donations.

However, the report also highlights the risks associated with non-custodial mixers, which operate without a central party and can facilitate illicit transactions. The Treasury Department has flagged these types of mixers as high-risk and recommends that Congress take steps to regulate them.

The report proposes a 'hold law' that would give authorities the power to freeze suspicious digital assets, as well as tighter AML rules for DeFi actors based on their specific roles. This development comes as Congress works through market structure legislation, including the CLARITY Act, which aims to hand jurisdiction over most digital asset types to the Commodity Futures Trading Commission.