The U.S. government formally announced its new position through a technical report sent to Congress in March 2026, in which it asserted that virtual currency mixers are not exclusively illegal methods.
The paper acknowledges that in an ecosystem of inherently transparent digital asset networks, users may require a mix of services to avoid exposing their wealth, corporate payments, and philanthropic donations to ongoing public scrutiny.
This technical assessment is a direct result of the instructions contained in Article 9 of the GENIUS Act of 2025. This law mandated the Treasury Department to research and analyze emerging technologies that can be used to combat illicit finance in the digital ecosystem.
When analyzing asset blending services, financial authorities chose a pragmatic approachestablishes operational distinctions based on who technically controls the funds.
The first block refers to custodial mixers, defined as those that act as traditional financial intermediaries that take physical possession of users’ assets. Due to this storage capacity, the Ministry of Finance has determined that these entities must operate under the Financial Services Business (MSB) framework.
This includes strict obligations to register with the Financial Crimes Enforcement Network (FinCEN), implement compliance programs, maintain detailed records of transactions, and issue reports of suspicious activity to authorities.
In contrast, non-custodial mixers represent the most complex sector for state surveillance. By acting as a decentralized protocol, meaning it uses self-running code without a central administrator, it is not subject to any single regulatory pressure.
The Treasury report acknowledges that this technical nature makes it difficult to apply traditional financial regulations and increases the risk profile. The problem is that there is no responsible entity;These tools are recognized as being more likely to evade control.
More than $37.4 billion denominated in the two largest stablecoins by market capitalization has been withdrawn from more than 50 bridges since May 2020, according to a Treasury analysis. During the same period, these same bridges received approximately $1.6 billion in deposits generated from mixed services. More than half of these deposits (more than $900 million) were concentrated on one particular bridge, which came under intense scrutiny for not interfering with transactions conducted by the DPRK (Democratic People’s Republic of Korea, or North Korea) on its platform, as North Korean-linked actors laundered the proceeds of digital asset theft.
Treasury report.
This perspective contrasts with the rigidity of 2022, when sanctions against the Tornado Cash protocol sparked intense legal debate over whether open software code can be sanctioned in the same way as physical entities. However, this report does not imply amnesty. This is because, as reported by CriptoNoticias, a lawsuit is currently underway in federal court against the software developer for allegedly facilitating money laundering.
The Treasury Department lifted sanctions on Tornado Cash in March 2025 after a federal appeals court ruled that OFAC had exceeded its limits. However, in August 2025, a Manhattan jury found co-founder Roman Storm guilty of operating a money transfer company without a license, but could not reach an agreement on money laundering charges or penalties. There is no final official verdict. Post-trial motions, a possible retrial of the stalled prosecution by the government, and defense appeals are expected.
Privacy vs surveillance
To resolve the technical impossibility of controlling decentralized protocols, the Treasury Department is proposing an intermediate legislative path. He refers to “retention laws” that create “safe havens.” This mechanism does not act on the mixer itself, but on the financial institution (such as an exchange or bank) that subsequently receives the funds.
The law would allow these organizations Temporarily freeze suspicious assets During investigations, it protects institutions from legal repercussions while verifying whether funds are coming from legitimate privacy activities or criminal activity.
For privacy advocates, this recognition is a necessary step forward in reconciling individual rights and state surveillance. On the contrary, critics and regulators have warned that validating the privacy benefits could complicate tracking illicit flows, given the sophistication of groups like Lazarus.
The report concludes without reinstating FinCEN’s 2023 proposal to classify all commingled transactions as a “major money laundering concern.” Instead, the Treasury is betting on a risk-based framework that is expected to shape future global regulation of traceability in crypto networks.
(Tag translation) Cryptocurrency
