US Treasury Recognizes Legitimate Uses of Crypto Mixers
The US Treasury has acknowledged that Bitcoin and crypto mixers can have lawful uses, marking a significant shift in tone from its earlier stance. In a March 2026 report to Congress under the GENIUS Act, the Treasury recognized that legitimate users may employ mixers to protect financial privacy on public blockchains. This statement comes from the same agency that sanctioned Tornado Cash in 2022, highlighting a change in perspective.
A crypto mixer pools transactions from multiple users, making it harder to trace individual payments. The Treasury report noted that this feature can help lawful users shield details about personal wealth, business payments, or charitable donations. However, the report emphasized that mixers should be used with safeguards, such as record-keeping, to ensure compliance.
The report did not ignore the illicit side of mixers. It documented how bad actors, including North Korean-linked groups, have used mixers to move stolen funds. Between January 2024 and September 2025, these groups accounted for over $2.8 billion in digital asset losses. Additionally, over $1.6 billion in mixer-related deposits were routed through bridges since May 2020.
The Treasury's stance contrasts sharply with its actions in 2022 and 2023, when it sanctioned Tornado Cash and designated certain mixing services as primary money-laundering concerns. The legal landscape shifted in March 2025 when a ruling found that smart contracts were not considered property under certain laws, leading to the lifting of Tornado Cash sanctions. FinCEN also withdrew two proposed rules targeting mixing transactions and unhosted wallets, citing potential negative impacts on legitimate financial activities.
For developers building privacy tools, the Treasury's acknowledgment provides a reference point when discussing with lawyers, investors, and regulators. However, the report suggests that compliant privacy tools will need to look different from the fully anonymous services of the past, incorporating safeguards like record-keeping. Lawmakers now have the Treasury's framing in hand as they weigh how privacy and anti-money laundering rules should fit together.