US Authorities Acknowledge Privacy Rights of Crypto Mixer Users

US Treasury acknowledges legality of crypto mixers for financial privacy.

The US Treasury has submitted a report to Congress, acknowledging the legality of using crypto mixers to protect financial privacy.

In 2022 and 2023, the department labeled mixers as money laundering hubs and imposed sanctions against Tornado Cash. Now, the ministry has noted that law-abiding users need mixers to conceal data about personal savings, business payments, or donations.

Criminal use of such services remains a concern. According to the Treasury, from January 2024 to September 2025, hackers linked to North Korea stole $2.8 billion in cryptocurrency. Of this, $1.5 billion was from the Bybit exchange hack. Perpetrators regularly use mixers to obfuscate their tracks.

Connection with Stablecoins and Bridges

The department has, for the first time, analyzed the interaction of mixers, stablecoins, and cross-chain bridges.

Since May 2020, users have withdrawn over $37.4 billion in the two largest stablecoins through 50 different bridges. During the same period, about $1.6 billion flowed from mixers to these platforms, with over $900 million of this amount passing through a single service popular among North Korean hackers.

Perpetrators rarely deposit fiat-pegged tokens directly into mixers. They typically send other assets there. Upon exit, criminals exchange coins for stablecoins to break the transaction chain before converting to fiat.

Regulation and Types of Mixers

The document distinguishes between custodial and non-custodial services. The former must register with FinCEN. They can provide authorities with data on clients and their transactions.

For the second category of platforms, the Treasury did not recommend new restrictions. The regulator continues to seek a balance between the risks of illegal financing and citizens’ right to privacy.

Treasury Initiatives

The department has asked Congress to pass several new laws. The Treasury proposes:

• introducing a right to freeze. Financial institutions could temporarily block suspicious crypto assets during investigations;
• clarifying rules for DeFi. Congress should determine which participants in the decentralized finance market fall under AML requirements;
• the “sixth special measure” to the US Anti-Terrorism Act. The Treasury seeks authority to block cryptocurrency transfers outside correspondent banking relationships.

Easing of Government Stance

The report comes amid a shift in state policy on crypto privacy. In March 2025, the Treasury lifted sanctions on Tornado Cash following a court decision. In August, the service’s co-founder Roman Storm was found guilty of operating without a license, but the jury could not reach a verdict on money laundering charges.

Later, Matthew Galeotti from the US Department of Justice stated that the department would cease prosecuting DeFi application developers under the statute for running an unlicensed money transmission business.

In January 2026, Senators Cynthia Lummis and Ron Wyden introduced a bill exempting programmers and non-custodial service providers from needing money transmitter licenses.