A proposed legislation has been put forward in the House of Representatives in the United States to implement a two-year ban on cryptocurrency mixers. Named the Blockchain Integrity Act, the bill is sponsored by five Democratic congresspeople, led by Sean Casten. In a statement, Casten described a crypto mixer as a platform that enables users to create a new address and withdraw their funds without revealing the connection between the depositor and withdrawal addresses.
The bill would temporarily prohibit financial institutions, including cryptocurrency exchanges, virtual asset service providers, and any other registered money service businesses, from accepting funds that have been through a mixer or allowing funds to be withdrawn directly to a mixer’s address. Each violation would result in a civil penalty of up to $100,000.
During this two-year period, the Treasury Department would compile a report that provides comprehensive information. This report would include the estimated percentage of transactions involving mixers that are associated with illicit finance, the legitimate uses of mixers, the ability of law enforcement to track or prevent transactions, and the regulatory approaches to mixers adopted in other jurisdictions.
The bill is co-sponsored by Representatives Bill Foster, Brad Sherman, and Emanuel Cleaver, but it has yet to be reviewed by the committee. Sherman, who has a history of opposing cryptocurrencies, was quoted by Casten as expressing his support for the legislation.
The United States has previously taken action against crypto mixers. In August 2022, the Treasury’s Office of Foreign Asset Control added addresses associated with the mixer Tornado Cash to its list of Specially Designated Nationals, effectively prohibiting US citizens from using it. This decision was upheld in court a year later. The founders of Tornado Cash are currently facing charges of money laundering, sanctions violations, and related crimes in the US and the Netherlands.
Privacy-focused cryptocurrency Monero (XMR) has also faced scrutiny after the European Union introduced new Anti-Money Laundering laws.
Source: https://casten.house.gov