Proposed legislation by US lawmakers could potentially disrupt the activities of financial institutions involved in processing transactions through crypto mixers. This bill, named the Blockchain Integrity Act, is aimed at imposing a temporary ban on such transactions to investigate their potential risks and implications.
Crypto mixers are services that enable users to mix different cryptocurrency funds with others to obscure their original source. This process involves pooling funds from multiple sources and redistributing them to different destinations, making it difficult to trace the origin of the funds.
The proposed bill suggests a two-year moratorium on financial institutions, including crypto exchanges, VASPs, and MSBs, from accepting incoming funds that have been routed through a mixer. Additionally, it aims to prevent outgoing funds from being withdrawn directly to a known mixer address during this period.
Congressman Sean Casten, the initiator of the bill, has expressed concerns about the potential money laundering risks associated with digital asset mixers. He believes that stringent audits are necessary to ensure oversight and prevent illegal activities, including terrorism financing, which have been linked to cryptocurrency transactions globally.
Other lawmakers supporting the bill, such as Congressman Foster and Congressman Sherman, have highlighted the role of mixers in facilitating financial crimes and concealing transactions, thereby posing a threat to US security. By implementing a temporary ban on mixer-related transactions, the bill aims to gather more insights and data to inform future policy decisions.
The proposed Blockchain Integrity Act represents a significant step towards regulating the use of digital asset mixers and enhancing financial security. By conducting a comprehensive study on the risks associated with mixers and privacy coins, lawmakers aim to develop tailored legislative measures to combat illegal activities in the crypto space. The outcome of this bill could have far-reaching implications for the future of cryptocurrency regulation in the United States.
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