The U.S. Treasury Department submitted a report to Congress acknowledging the legitimate privacy uses of cryptocurrency mixers and recommending legislation to freeze questionable digital assets.

The U.S. Treasury Department submitted a 32-page report to Congress stating that cryptocurrency mixers can be used for legitimate financial privacy purposes, allowing users to protect sensitive information such as personal wealth, business payments, or charitable donations. This stance represents a shift from its position when it sanctioned Tornado Cash in 2022. The report reveals that North Korean cybercriminals stole at least $2.8 billion in digital assets between January 2024 and September 2025, including $1.5 billion stolen from Bybit, and routinely used mixers for multi-step money laundering. Since May 2020, over $1.6 billion in mixer deposits have flowed into cross-chain bridges, with over $900 million concentrated in a bridging protocol linked to North Korean-related money laundering activities. The report distinguishes between custodial and non-custodial mixers, noting that compliant custodial mixers can provide information such as customer identity and off-chain transaction data, but did not recommend imposing new restrictions on non-custodial mixers. Regarding legislative recommendations, the report urges Congress to enact a dedicated "freeze law" for digital assets, providing a safe harbor for financial institutions to temporarily freeze suspicious assets during short-term investigations. It also recommends that Congress clarify which DeFi participants should bear anti-money laundering obligations. The report further proposes adding a "sixth special measure" to Section 311 of the USA PATRIOT Act, authorizing the Treasury Department to impose bans or restrictions on certain digital asset transfers that do not involve correspondent banking relationships. This report is based on Section 9 of the GENIUS Act, which is scheduled to be signed into law in July 2025.