In a policy report on digital assets submitted to Congress, the U.S. Treasury Department has for the first time explicitly stated that cryptocurrency mixers are not entirely illegal and have legitimate uses in protecting financial privacy. This statement is seen as a significant shift in the attitude of U.S. regulators towards mixing technology following the Tornado Cash sanctions incident.
The report notes that in a public blockchain environment, legitimate users may want to protect sensitive transaction information, such as personal asset size, business payment data, or records of charitable donations. Mixers can enhance transaction privacy to some extent, thereby reducing the risk of information exposure caused by on-chain transparency.
Regulatory Classification of Mixers
The Treasury Department distinguishes between two types of mixers in the report:
Custodial Mixers
Non-Custodial Mixers
Custodial mixing services are identified as potentially falling under money services businesses (MSB) and therefore need to register with FinCEN and fulfill anti-money laundering and customer identification obligations.
As for non-custodial mixers, the Treasury Department did not propose new regulatory restrictions nor did it explicitly support the mixing transaction record retention rules proposed by FinCEN in 2023. The report states that future policies need to balance anti-money laundering regulation with user privacy.
Scale of Money Laundering by North Korean Hackers
The report also disclosed the ongoing threat of North Korean cyber criminal activities to the digital asset ecosystem.
According to statistics from the U.S. Treasury, between January 2024 and September 2025, North Korean-related hacker groups stole at least $2.8 billion in crypto assets, conducting multi-layered money laundering through mixers.
The data shows that since May 2022, the scale of funds from mixing services flowing into cross-chain bridges has exceeded $1.6 billion, with more than $900 million concentrated in a cross-chain bridge protocol connected to North Korean money laundering activities.
U.S. Proposing Digital Asset "Freeze Safe Harbor"
In the policy suggestion section, the U.S. Treasury Department recommends Congress establish a mechanism for "hold laws" for digital assets.
This mechanism would provide a legal safe harbor for financial institutions, allowing them to temporarily freeze related digital assets during investigations of suspicious transactions to prevent rapid transfer of funds off-chain or across-chain networks.
Additionally, the report also recommends:
Clarifying anti-money laundering obligations for DeFi participants
Expanding the regulatory authority of the Patriot Act
Introducing the "Sixth Specific Measure" to restrict certain digital asset transfers
Analysts believe that this policy package shows that U.S. regulators are attempting to establish a new regulatory framework that balances combating nation-state-level cybercrime with protecting blockchain privacy.
