Treasury tells Congress mixers have valid privacy uses, recommends ‘hold law’ for suspicious crypto
The Treasury Department acknowledged legitimate privacy uses for crypto mixers but urged Congress to enact a 'hold law' for suspicious assets.Summary
The U.S. Treasury Department issued a report to Congress acknowledging that crypto mixers can serve legitimate financial privacy purposes for lawful users, such as protecting sensitive personal or business wealth information. This marks a shift from previous actions like sanctioning Tornado Cash. However, the report stresses that criminal use remains a major concern, citing billions stolen by DPRK cybercriminals who frequently use mixers. Treasury analysis also showed significant stablecoin flows through cross-chain bridges involving mixers. The report distinguishes between custodial mixers, which are already regulated, and non-custodial ones, stopping short of recommending new restrictions for the latter. Legislatively, Treasury recommends Congress enact a digital asset-specific "hold law" to allow financial institutions to temporarily freeze suspicious assets for investigation. It also suggests specifying AML/CFT obligations for DeFi actors and adding a "sixth special measure" to Section 311 of the USA PATRIOT Act.
(Source：The Block)