U.S. Treasury Department Denies Banning Coin Mixers: New Regulations Aim to Increase Transparency, Hoping to Collaborate with Industry to Develop

The U.S. Department of the Treasury's Under Secretary for Terrorism and Financial Intelligence, Brian Nelson, stated that the Treasury Department does not intend to ban encryption mixer services, but rather aims to increase transparency.

Mixer Crackdowns in Law Enforcement Actions

Brian Nelson spoke at the annual CoinDesk consensus conference in Austin, addressing the 2023 proposal by FinCEN, the financial crime enforcement network, to categorize mixers as "significant money laundering problems" and requiring Virtual Asset Service Providers (VASPs) to report any cryptocurrency transactions involving mixers to FinCEN.

US to Fully Regulate Mixers! Financial Institutions Required to Report Relevant Transactions

FinCEN's new rules, along with previous enforcement actions against Tornado Cash and Samourai Wallet, are seen by many within the crypto industry as evidence of a potential complete ban on mixers in the United States, a claim firmly denied by the Treasury.

Regulatory Crackdown on Mixer Services Continues! Samourai Wallet Founder Accused of Money Laundering by US Department of Justice

Treasury: US Has No Intention to Ban Mixers

Brian Nelson emphasized that the new rules are not a ban on mixers but a proposed regulation aimed at increasing transparency.

He empathized with the desire for financial privacy among cryptocurrency users but also suggested that the crypto industry should work together with the Treasury to find a way to enhance privacy protection without facilitating terrorist financing.

He stated:

From our perspective, we believe that there is a distinction between "obfuscation" and "support" for privacy-related anonymous services. We certainly agree that on a public chain basis, everyone would want to have a certain level of privacy, and in that spirit, we hope to work closely with the industry to develop tools that enhance privacy.

Mixers Are Not Created for Privacy

Brian Nelson also mentioned that most mixers are not actually built to enhance privacy but to evade Anti-Money Laundering (AML) and Know Your Customer (KYC) reporting, making them "very attractive" to wrongdoers, including those like North Korea.

He concluded:

It's not that everyone needs to know who you are transacting with, it's just that people and service providers need to know they are not inadvertently funding Hamas or North Korea's weapons programs.