In the United States, cryptocurrency mixing has almost always had a very bad reputation. In 2022, the US Treasury had already taken sanctions against cryptocurrency mixers Tornado Cash and Blender.io. The reason ? Money laundering. This year, cryptocurrency mixing is targeted by a bill requiring transparency from crypto mixers that is difficult to provide. At the origin of this proposed law, an alleged involvement of cryptocurrencies in the recent Hamas terrorist attack against Israel. Details.
Crypto mixers: a threat to national security according to Washington
Fears related to the use of cryptocurrencies for financing terrorism are increasingly serious and Washington is on high alert. Indeed, to preserve national security, the Financial Crimes Enforcement Network (FinCen), a division of the US Treasury, decided that it was necessary to tighten regulatory oversight of crypto mixers.
This Thursday, October 19, she published a proposed law aimed at imposing on cryptocurrency mixers recordkeeping and reporting requirements for financial transactions. This is in reality a real attack on the anonymity which is the appeal of these tools! US Deputy Treasury Secretary Wally Adeyemo explains the Treasury’s determination to control crypto mixers:
“Today’s action underscores Treasury’s commitment to combating the exploitation of convertible virtual currency mixing by a wide range of illicit actors, including state-affiliated cyber actors, cybercriminals and terrorist organizations. […] notably Hamas and Palestinian Islamic Jihad. »
To decide whether or not to adopt the bill, a 90-day public consultation period will be observed to collect public comments.
Anti-mixer crusade: good news or bad news?
FinCen’s proposal originated from a recent Wall Street Journal article on the likely contribution of cryptos to the Hamas attack in Israel. In reality, according to the article, nearly $82 million in crypto was used to finance Hamas.
Senators and more than a hundred other American legislators therefore demanded answers from Joe Biden’s administration on the issue. Chainalysis, which sought to defend cryptos, revealed that only $450,000 worth of cryptos were directly linked to terrorist activity. This still confirmed the role of cryptos in this deadly attack.
So, even if it will affect the concept of anonymity, this proposed law could strengthen the credibility of cryptos whose total market capitalization has been falling since the start of the year.
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