The Biden administration has designated crypto "mixers" as primary money-laundering hubs.
In a Thursday notice, United States Treasury Department’s Financial Crimes Enforcement Network (FinCEN) proposed requiring domestic financial institutions and agencies to "implement certain recordkeeping and reporting requirements" for transactions involving crypto mixers.
The comission said it had assessed that "the percentage of CVC [convertible virtual currencies] transactions processed by CVC mixers that originated from likely illicit sources is increasing."
The U.S. Treasury Department's proposal, which employs laws typically used against foreign banks and jurisdictions, is part of a broader effort to shape the future of the crypto ecosystem.
The proposal follows mounting pressure from Capitol Hill regarding the role of cryptocurrencies in financing militant groups, particularly in the wake of the October 7 Hamas attack on Israel.
"Today’s action underscores Treasury’s commitment to combating the exploitation of convertible virtual currency mixing by a broad range of illicit actors, including state-affiliated cyber actors, cybercriminals, and terrorist groups," said Wally Adeyemo, deputy Treasury secretary.
The proposed regulation will undergo a 90-day public comment period before potential adoption.
The proposal allows targeted entities to take remedial action, potentially leading to their release from the sanctions.
The Treasury Department noted that some targets in the past have reformed their practices and implemented significant measures to mitigate money-laundering risks, leading to a decision not to pursue a final rule implementing special measures.
Mixers are cryptocurrency platforms that facilitate relatively anonymous
Read more on cryptonews.com