Bitcoin
US Treasury Is Not Trying to Ban Crypto Mixers, Senior Official Says
AUSTIN, Texas — The U.S. Treasury Department is not seeking to ban cryptocurrency mixing services, a senior official said Wednesday.
Speaking at CoinDesk’s annual consensus conference in Austin, Brian Nelson – Under Secretary of the Treasury for Terrorism and Financial Intelligence – addressed the Financial Crimes Enforcement Network (FinCEN) Proposal 2023 for classify mixers as a “top money laundering concern” and require virtual asset service providers (VASPs) to report any cryptographic transactions that involve mixing to the agency.
FinCEN’s proposal – along with a growing number of U.S. Department of Justice enforcement actions against mixed services including Tornado Cash and Samourai Wallet – has been seen by many in the industry as evidence of a coming attempt to ban crypto mixing entirely in the US, which the Treasury firmly denies.
“Ultimately, this [proposal] it’s not a ban on mixers,” Nelson said. “This is a proposed rule intended to promote transparency.”
Nelson said he sympathizes with crypto users’ desires for financial privacy, but suggested the industry and Treasury should work together to find ways to increase privacy without enabling terrorist financing.
“From our perspective, we believe there is a difference between obfuscation and anonymity-enhancing services that support privacy – of course we fully recognize that in the context of public blockchains… that there would be a desire to have a certain degree of privacy, Nelson said. “In that spirit, we want to work closely with the industry to identify and collaborate on tools that can improve privacy.”
Nelson said that most of the mixers he is seeing are not actually created to increase privacy, but are made to bypass anti-money laundering (AML) and know-your-customer (KYC) reporting requirements, making them those that are “very attractive” to bad people. actors, including North Korea.
“It’s not that everyone needs to know who you’re negotiating with,” Nelson said — just that both people and VASPs need to know that they’re not “unwittingly” financing Hamas or North Korea’s weapons program.