FinCEN seeks tighter controls on crypto mixing services

The proposed rule mandates that regulated financial entities flag transactions suspected of involving crypto mixing, especially those with international implications


Ink Drop/Shutterstock modified by Blockworks


The US Treasury’s Financial Crimes Enforcement Network (FinCEN) is zeroing in on crypto transaction mixers. 

Released Thursday, FinCEN’s Notice of Proposed Rule Making (NPRM) brands crypto transaction mixing as a “primary money laundering concern.” 

The proposal would require regulated financial institutions to report transactions when there is reason to suspect involvement in transaction mixing, particularly concerning activities outside the US.

Mixing is a process that blends different streams of crypto transactions to obscure the original source, thereby making it more difficult to trace individual transactions.

While the proposed rule aims to bolster transparency and curb illicit financial flows, questions remain over its real-world efficacy, particularly given crypto’s inherently decentralized and pseudonymous nature.

The agency’s proposal is part of a broader Treasury offensive against mixing services that began in earnest last year. and Tornado Cash, platforms both implicated in North Korean money laundering activities by US authorities, have spurred regulatory efforts to curb their use.

Read more: Attorneys say DOJ’s Tornado Cash charges contradicted FinCEN guidance

“[Convertible virtual currency] mixing offers a critical service that allows players in the ransomware ecosystem, rogue state actors and other criminals to fund their unlawful activities and obfuscate the flow of ill-gotten gains,” FinCEN Director Andrea Gacki said.

That approach has angered members of the crypto ecosystem. Critics say the Treasury’s Office of Foreign Assets Control, in its fight to clamp down on illicit proceeds, went a step too far — eventually leading to the arrest of a developer and charges against Tornado Cash’s founders.

FinCEN argues its latest proposal aligns with ongoing efforts to counteract a spectrum of threats, from sanctions-dodging countries to groups like Hamas and Palestinian Islamic Jihad.

Don’t miss the next big story – join our free daily newsletter.


Upcoming Events

Hilton Metropole | 225 Edgware Rd, London

MON - WED, MARCH 18 - 20, 2024

Crypto’s premier institutional conference returns to London in March 2024. The DAS: London Experience:  Attend expert-led panel discussions and fireside chats  Hear the latest developments regarding the crypto and digital asset regulatory environment directly from policymakers and experts   Grow your network […]

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Pack your bags, anon — we’re heading west! Join us in the beautiful Salt Lake City for the third installment of Permissionless. Come for the alpha, stay for the fresh air. Permissionless III promises unforgettable panels, killer networking opportunities, and mountains […]

recent research



Akash is a general-purpose compute platform with GPUs, storage, LLM training or inference, and validator hosting through its two-sided marketplace.


The SEC could allow half a dozen or more such funds to launch at once, Ark Invest CEO says


2023 saw a decline in a16z crypto funding, but the behemoth VC firm teased what it’s excited for next year


“Iran Unchained” launched a new version of its grant platform to make donations to activists easier


The stablecoin marks the first time a regulated European bank has made a euro-pegged stablecoin available on a crypto exchange


Build it and they will come, perhaps, but making crypto easier to use is turning out to be just as important


Amid moves by Itau Unibanco and Nubank, the country could serve as “a proof of concept” for TradFi-crypto integrations, industry research exec says