In a March 2026 report to Congress under the GENIUS Act, the US Treasury acknowledged that crypto mixers can serve legitimate purposes. The agency noted that lawful users may utilize these tools to protect financial privacy regarding personal wealth, business payments, or charitable donations on public blockchains.
This position marks a shift from 2022, when the Treasury sanctioned Tornado Cash. The agency now suggests that privacy tools can coexist with compliance measures, provided they incorporate safeguards such as record-keeping. The report emphasizes that such tools are not inherently illegal.
Despite this acknowledgment, the Treasury continues to track illicit activity. The report states that North Korean-linked thefts resulted in over $2.8 billion in losses between January 2024 and September 2025. Additionally, since May 2020, more than $1.6 billion in mixer-related deposits moved through cross-chain bridges.
The legal landscape has evolved since the 2022 sanctions. In March 2025, sanctions against Tornado Cash were lifted following a ruling that smart contracts do not constitute property under certain laws. Subsequently, FinCEN withdrew two proposed rules targeting mixing transactions and unhosted wallets, citing potential negative impacts on legitimate financial activities.
