US lawmakers have introduced a new bill that aims to temporarily prevent financial institutions from transacting with funds passed through crypto mixers.
Congressman Sean Casten (IL-06) introduced the bill on May 7 and received support from Representatives Bill Foster, Brad Sherman, and Emmanuel Cleaver.
Blockchain Integrity Act
The proposed legislation, called the Blockchain Integrity Act, aims to impose a two-year moratorium on financial institutions, such as crypto exchanges, virtual asset service providers (VASPs) and other registered money service companies (MSBs), from accepting incoming money flows sent through a via a mixer. It is also intended to prevent outgoing funds from being withdrawn directly to a known mixer address.
During this period, the bill directs the Treasury Department, SEC, CFTC, and DOJ to conduct a comprehensive investigation into digital asset mixers, privacy coins, and anonymity-enhancing technologies. This study involves analyzing statistics on its illegal use, insights into legitimate applications and drafting tailor-made legislative proposals to combat illegal activities by specific perpetrators.
A crypto mixer is a service used to “mix” various crypto funds with others to obscure their origins. Normally this involves pooling source funds from different inputs over a longer random period of time before redistributing them to destination addresses.
Congressman Casten believed that digital asset mixers should be treated as potential money laundering tools unless they are subject to strict audits. He claimed that digital assets have been used worldwide in recent years to finance terrorist activities, adding that:
“A temporary ban while we study this technology will help us better understand how it is being used for illegal purposes, prevent future crypto-funded terrorism, and inform future policymaking.”
Likewise, Congressman Foster emphasized that mixers enable malicious actors to commit financial crimes that undermine American security. Meanwhile, Congressman Sherman noted that mixers help achieve crypto’s goal of facilitating hidden transactions.
This bill specifically comes amid heightened scrutiny by U.S. authorities on mixers, alleging that these privacy-enhancing services facilitate illicit financial activities.