A bill proposing a two-year ban on crypto mixers was introduced in the United States House of Representatives. The legislation, called the Blockchain Integrity Act, is sponsored by five Democratic congress members led by Sean Casten. Casten described a crypto mixer as a pool that allows users to create a new address and withdraw funds without explaining the connection between the deposit and withdrawal addresses.
What to Expect for Crypto Mixers?
The bill will temporarily prohibit financial institutions, including crypto exchanges, crypto asset service providers, and other registered money service businesses, from accepting funds passed through a mixer or allowing withdrawals directly to a mixer’s address. Each violation will be subject to a fine of up to $100,000.
During the two-year period, the Treasury Department will prepare a report detailing a wide range of information. The report will include an estimated percentage of mixer transactions involving illegal financing, legitimate uses of mixers, law enforcement’s capacity to track or block transactions, and regulatory approaches to mixers in other jurisdictions.
Notable Process in the US
Representatives Bill Foster, Brad Sherman, and Emanuel Cleaver became co-sponsors of the bill, which has not yet gone to committee. Sherman, who has a long history as a crypto opponent, told Casten, “The very name of cryptocurrency implies it; a kind of secret money. Terrorist groups, sanction dodgers, tax evaders, cybercriminals, etc., all use mixers to hide their illegal activities.”
The United States had previously taken action against crypto mixers. In August 2022, the Treasury’s Office of Foreign Assets Control placed addresses associated with the mixer Tornado Cash on the Specially Designated Nationals list, effectively banning US citizens from using it. This move survived a court challenge a year later. The founders of this mixer are charged in the US and the Netherlands with money laundering, sanctions violations, and related crimes.
The crypto mixer Monero has also been under pressure following the implementation of the European Union’s new Anti-Money Laundering laws.
