In a 32-page report submitted to Congress, the U.S. Treasury signaled a notable shift in its stance toward crypto mixing services. While the agency previously imposed strict sanctions on platforms such as Tornado Cash, it now recognizes that mixers can have legitimate use cases in protecting financial privacy. According to the report, these tools may be used by honest participants seeking to shield personal wealth information, keep commercial payments confidential, or maintain anonymity when making donations.
The report states that since May 2020, roughly $1.6 billion worth of assets exiting mixing services has been routed through cross-chain bridges. More than $900 million of that amount reportedly accumulated in a single bridge linked to North Korean cybercriminal activity. The Treasury highlighted that stablecoins are increasingly used in laundering schemes as criminals adopt more complex strategies to obscure transaction trails.
To address these risks, the Treasury is calling for a “hold” or temporary freeze law that would allow financial institutions to suspend suspicious digital asset transactions for a limited period. The proposal aims to curb illicit financial flows, particularly those involving stablecoin transfers. The report also urges lawmakers to clarify which actors in the decentralized finance ecosystem should be subject to anti-money laundering obligations.
