The ccwants to crack down on crypto mixers and eliminate anonymous crypto payments

The United States Treasury’s Financial Crimes Enforcement Network (FinCEN) recently proposed a way of dealing with anonymous transactions in the crypto industry.

FinCEN proposes the elimination of crypto mixers

According to the proposal, FinCEN believes that it is time to eliminate crypto mixers — services that allow users to deposit their tokens and mix them with the tokens belonging to other people. Once the tokens come out, there is no way to determine which tokens belong to which trader.

This allows traders to withdraw their coins to unknown wallets, thus ensuring their anonymity. However, while this method was invented to combat block explorers and allow crypto users to maintain their privacy for privacy’s sake, it is also commonly used by online criminals who steal cryptocurrencies and use mixers to get away with it. Not to mention suspicions of mixers being used for terrorism funding and other illicit purposes.

Despite recent reports that claim that the use of crypto for terrorism funding is actually quite minimal, the US government is using this as an excuse to crack down on these technologies. Federal regulators claim that eliminating mixing services would increase transparency and increase their ability to regulate the space.

FinCEN’s proposal is the latest one involving this matter, and it comes after the US officials’ attempt to block funding to Hamas, a Palestinian militant group that recently conducted attacks on Israel. According to FinCEN, the group’s activities were funded through a Gaza-based crypto exchange, suggesting that the group uses digital assets as the main source of financial support.

Furthermore, crypto mixers such as Tornado Clash and Blender — which the US sanctioned last year — are also commonly used by the Lazarus Group, a North Korean hacking team responsible for some of the largest crypto thefts in the industry’s history.

A threat to the US crypto users’ privacy

Wally Adeyemo, the deputy treasury secretary, stated that the new action underscores the Treasury’s commitment to combating the exploitation of Convertible Virtual Currency mixing by a broad range of illicit actors. Adeyemo added that this includes cybercriminals, state-affiliated cyber actors, as well as terrorist groups.

In other words, there is a long list of those who rely on these services to hide their financial activities that the US government aims to expose and prevent moving forward. Of course, if crypto mixers are banned in the US, this would still allow their use in other areas of the world.

As a result, banning the mixers would only expose transactions conducted by US citizens. As some have argued, this will erode the US citizens’ financial freedoms while claiming that it is done for their protection.

It doesn’t go against it.

I’m just saying that as people are caught up in the etf price boost, their financial freedoms are simultaneously being eroded.

— Lyn Alden (@LynAldenContact) October 21, 2023