In a recent development, US lawmakers have put forth a new bill called the Blockchain Integrity Act, with the primary aim of halting financial institutions from engaging in transactions involving funds that have passed through crypto mixers. The bill was introduced by Congressman Sean Casten and has garnered support from Representatives Bill Foster, Brad Sherman, and Emmanuel Cleaver.
The Blockchain Integrity Act proposes a two-year moratorium on financial institutions, including crypto exchanges, VASPs, and MSBs, from accepting incoming funds that have undergone mixing. Additionally, it seeks to prevent outgoing funds from being withdrawn directly to a known mixer address. During this period, the bill mandates various departments like the Treasury Department, SEC, CFTC, and DOJ to conduct a thorough study on digital asset mixers, privacy coins, and anonymity-enhancing technologies. This study will involve analyzing data on their illicit uses, understanding legitimate applications, and formulating tailored legislative recommendations to combat illegal activities.
Crypto mixers are services utilized to blend different crypto funds together to obfuscate their original source. This process typically entails pooling funds from various inputs over a specific period before reallocating them to destination addresses. Congressman Casten believes that digital asset mixers should be viewed as potential tools for money laundering unless subjected to rigorous audits. He raised concerns about the use of digital assets in funding terrorist activities globally, emphasizing the need for a temporary ban to study this technology further.
Congressman Foster highlighted the detrimental impact of mixers in enabling malicious actors to conduct financial crimes that undermine US security. On the other hand, Congressman Sherman acknowledged that mixers play a crucial role in achieving crypto’s goal of facilitating discreet transactions. This bill comes at a time when US authorities are intensifying their scrutiny on mixers, alleging that these services contribute to illicit financial activities.
Overall, the Blockchain Integrity Act signifies a significant shift in the regulatory landscape surrounding crypto mixers. The proposed moratorium and comprehensive study reflect policymakers’ concerns about the potential misuse of digital assets for illicit purposes. As the cryptocurrency ecosystem continues to evolve, regulatory initiatives like this bill will shape the future of financial transactions involving digital assets. It remains to be seen how the industry will adapt to these new regulations and what impact they will have on the broader crypto space.