The US Treasury told Congress that crypto “mixers” — services that obscure transaction histories on public blockchains to protect user privacy — can have lawful, legitimate uses. The department’s report, produced under directives in the GENIUS stablecoin regulatory framework, noted that as consumers increasingly use digital assets for payments they “may want to use mixers to maintain more privacy in their consumer spending habits.”
The report acknowledged that lawful users may rely on mixers to preserve financial privacy when transacting on public ledgers. Examples cited include shielding sensitive details about personal wealth, corporate payments or charitable donations from appearing on an open blockchain.
At the same time, Treasury warned about clear risks. Darknet services and non-custodial (decentralized) mixers have been exploited by cybercriminals to launder proceeds and move illicit funds, including schemes tied to North Korea. The report also observed that custodial mixers, which take temporary possession of funds during the mixing process, can be a source of identifying information that helps link users and trace transaction flows.
Privacy in crypto is a growing flashpoint as financial surveillance increases and US lawmakers consider tighter know-your-customer (KYC) requirements for digital asset service providers and potentially some decentralized finance (DeFi) platforms. The Digital Asset Market Clarity Act of 2025 (the CLARITY bill) prompted pushback from DeFi developers and investors over language they say could force identity collection on decentralized platforms and offers inadequate protections for open-source contributors, according to Alexander Grieve, vice president of government affairs at Paradigm.
Observers outside the industry have also sounded alarms about broader privacy threats. Former hedge fund manager Ray Dalio has warned that central bank digital currencies (CBDCs) are likely and could pose major risks to financial privacy, calling them a “very effective controlling mechanism” in remarks during an interview with Tucker Carlson.
This report aims to summarize the Treasury’s findings and the surrounding debate. Cointelegraph is committed to independent, transparent journalism; this article follows the publication’s editorial policy and readers are encouraged to verify information independently.