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US Treasury Report Acknowledges Lawful Use of Crypto Mixers
The US Treasury has officially recognized that crypto mixers can serve legitimate purposes, marking a significant shift in its stance on the use of such privacy tools. In a report submitted to Congress in March 2026 under the GENIUS Act, the Treasury stated that lawful users may utilize mixers to protect their financial privacy on public blockchains, a notable change from its previous actions, including the 2022 sanctions against Tornado Cash.
Mixers function by pooling cryptocurrency from multiple users and redistributing it, making it more challenging to trace transactions. The Treasury's report highlights the importance of this capability, noting that it can help individuals safeguard transaction details related to personal wealth, business payments, or charitable contributions. However, the report emphasizes that these tools should be accompanied by appropriate safeguards, such as record-keeping, to ensure compliance with regulations.
Despite this acknowledgment, the report does not absolve mixers of their association with illicit activities. It details how bad actors continue to exploit these services, with North Korean-linked thefts resulting in over $2.8 billion in digital asset losses between January 2024 and September 2025. The report also notes that since May 2020, more than $1.6 billion in mixer-related deposits have been funneled through blockchain bridges, underscoring the ongoing challenges in regulating these tools.
The Treasury's evolving position comes after a series of regulatory actions, including the lifting of sanctions on Tornado Cash in March 2025 following a legal ruling. As developers of privacy tools seek to navigate this regulatory landscape, the report provides a reference point for discussions with legal and regulatory bodies, although it also indicates that compliant privacy solutions may need to differ from the fully anonymous services previously available. Lawmakers are now tasked with considering how to balance privacy and anti-money laundering regulations in light of this new framework.
Source: KLEA News