News
The US Treasury is not looking to ban cryptocurrency mixers, a senior official says
AUSTIN, Texas — The U.S. Treasury Department is not attempting 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) 2023 proposal TO classify mixers as a “primary money laundering concern” and require virtual asset service providers (VASPs) to report to the agency any crypto transactions that involved mixing.
FinCEN’s proposal – along with a growing number of enforcement actions by the US Department of Justice against mixed services including Tornado Cash and Samourai Wallet – was seen by many in the industry as evidence of an impending attempt to ban cryptocurrency mixing entirely in the United States, which the Treasury firmly denies.
“In the end, this [proposal] it’s not a ban on mixers,” Nelson said. “This is a proposed rule designed to promote transparency.”
Nelson said he was sympathetic to cryptocurrency users’ desire for financial privacy, but suggested that the industry and Treasury should work together to find ways to improve privacy without enabling terrorist financing.
“From our perspective, we believe that there is a difference between obfuscation and anonymity-enhancing services that support privacy – obviously we totally recognize that, in the context of public blockchains… that there would be a desire to have a certain degree of privacy,” Nelson said. “In this spirit, we want to work closely with industry to identify and collaborate on tools that can improve privacy.”
Nelson said that most mixers he sees are not actually created to enhance privacy, but are made to evade anti-money laundering (AML) and know-your-customer (KYC) reporting requirements, thus making them “very attractive” for the bad guys. actors, including North Korea.
“It’s not that everyone needs to know who you’re transacting with,” Nelson said, just that people and VASPs need to know that they are not “unknowingly” funding Hamas or North Korea’s weapons program.