A new bill has been introduced by US lawmakers with the aim of imposing a temporary ban on financial institutions engaging in transactions involving funds that have passed through crypto mixers. The bill, named the Blockchain Integrity Act, has received support from Representatives Bill Foster, Brad Sherman, and Emmanuel Cleaver, in addition to Congressman Sean Casten who introduced it on May 7.
The proposed legislation seeks to enforce a two-year moratorium on financial institutions, such as crypto exchanges and virtual asset service providers, from accepting incoming funds routed through a mixer. Additionally, it aims to prohibit outgoing funds from being withdrawn directly to a known mixer address. During this period, the bill mandates various agencies including the Treasury Department, SEC, CFTC, and DOJ to conduct a comprehensive study on digital asset mixers, privacy coins, and anonymity-enhancing technologies.
A crypto mixer is a service utilized to mix different crypto funds with others to obscure their origin. This process usually involves pooling funds from various sources over a random period before redistributing them to destination addresses. According to Congressman Casten, digital asset mixers should be regarded as potential tools for money laundering unless subjected to rigorous audits.
Congressman Casten highlighted that digital assets have been utilized to finance terrorist activities globally in recent years. By implementing a temporary ban on mixers, the bill aims to better understand how they are used for illicit purposes and prevent future crypto-funded terrorism. Congressman Foster also emphasized that mixers allow malicious actors to commit financial crimes that undermine US security.
The introduction of the Blockchain Integrity Act comes at a time of heightened scrutiny by US authorities on mixers. Allegations have been made that these privacy-enhancing services facilitate illicit financial activities, prompting the need for regulatory measures such as those proposed in the new bill.
The proposed legislation represents a significant step towards regulating the use of crypto mixers by financial institutions. By imposing a moratorium and conducting a thorough study on digital asset mixers, privacy coins, and related technologies, the bill aims to combat illicit financial activities and enhance security in the digital asset space.
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