US House Proposes Bill to Ban Cryptocurrency Mixers for Two Years

cryptonews.com:

Democratic representatives have  introduced the US Blockchain Integrity Act  to tighten regulations in the cryptocurrency sphere. The act aims to crack down on cryptocurrency mixers, often utilized for illicit financial activities.  Led by Sean Casten and supported by fellow Democrats, the  proposed bill seeks to enact a two-year ban on cryptocurrency mixers.

A crypto mixer serves as a pool, enabling users to generate new addresses and withdraw funds without disclosing the connection between the depositor and withdrawal addresses.  This opacity poses a significant challenge for law enforcement agencies, hindering efforts to track fund origins and destinations and creating an avenue for unlawful activities.

Cryptocurrency has been used to finance terrorist attacks around the world, made possible by digital asset mixers.

I’m introducing legislation to temporarily prohibit crypto mixers while we study this technology & how it is used for illicit purposes.https://t.co/8JrLmipe6J

— Rep. Sean Casten (@RepCasten) May 7, 2024

The proposed legislation aims to disrupt the flow of illicit funds and promote transparency by prohibiting financial institutions, cryptocurrency exchanges, and registered money service businesses from accepting funds processed through a mixer.  Violations of this ban would incur civil penalties of up to $100,000, serving as a deterrent against facilitating mixer-related transactions.

Additionally, the bill mandates that the Treasury Department compile a comprehensive report during the ban period evaluating various aspects of mixer transactions, including involvement in illicit finance, legitimate use cases, law enforcement capabilities, and regulatory approaches in other jurisdictions.

Cryptocurrency