The Financial Crimes Enforcement Network (FinCEN) has released a new proposal for the US government to monitor crypto mixers.
FinCEN cites Section 311 of the U.S. PATRIOT Act to propose requirements for financial institutions and financial institutions to maintain records and reports on transactions conducted through crypto or “convertible virtual currency” (CVC) mixers.
Mixers, such as Tornado Cash, aim to obscure the identities of users making transactions by passing their tokens through a collection of other tokens of random origin and then distributing the coins to the recipient, often using multiple addresses.
FinCEN says transactions outside the US are still a concern for the government because such mixers provide foreign bad actors with the means to commit crimes.
“Because CVC mixing provides foreign illicit actors with greater anonymity allowing them to launder their illicit proceeds, FinCEN therefore assesses that transactions involving CVC mixing within or involving a jurisdiction outside the United States are of primary importance to the money laundering of money, and after they have completed the The necessary consultation also believes that imposing additional record-keeping and reporting requirements would help mitigate the risks posed by such transactions.
Such reporting will help law enforcement identify the perpetrators behind illegal transactions and prevent, investigate and prosecute illegal activities, and – through greater transparency – make such transactions less attractive and useful to illegal actors.”
Tornado Cash, the most popular crypto mixer, was blacklisted by the US government in August 2022 and its creator was arrested soon after.
However, according to blockchain analytics firm Arkham Intelligence, Tornado Cash is still the largest crypto mixer on Ethereum (ETH), having moved through $77.35 million in assets in just 30 days.
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