The U.S. Treasury Department announced Thursday that it seeks to issue a blanket designation that all cryptocurrency “mixers,” which allow crypto users to make on-chain transactions anonymously, be considered money-laundering hubs that threaten America’s national security. The proposed rule, if adopted, would require financial institutions to report any information about any financial transaction that it knows or would have reason to suspect involved crypto coin mixers operating either within or outside of the United States. The policy now opens to a 90 day period for public comment. It appears all but certainly linked to the ongoing crisis in Israel and Palestine, where a deadly assault by the militant group Hamas on southern Israel earlier this month led the Israeli government to bombard the Palestinian territory of the Gaza Strip with thousands of bombs, triggering a humanitarian crisis. In recent days, numerous American lawmakers have linked the escalating situation to the proliferation of cryptocurrency. In following that narrative, a Treasury Department official explicitly connected recent events in the Middle East to the Treasury’s decision Thursday to ratchet up its policy on cryptocurrency mixers. Many in the crypto industry do not see such censorship as warranted, however. Analysts and crypto industry leaders began pushing back against a growing narrative in Washington that crypto was disproportionately responsible for the growing crisis in Israel and Palestine, or that the novel technology poses greater threats to safety than other forms of banking.
The U.S. Treasury Department announced a proposed rule that would require financial institutions to report any information about any financial transaction that it knows or would have reason to suspect involved crypto coin mixers operating either within or outside of the United States. This decision appears to be linked to the ongoing crisis in Israel and Palestine, where a deadly assault by Hamas on southern Israel earlier this month has led to a humanitarian crisis. Many in the crypto industry do not see this proposed censorship as warranted, as analysts and crypto industry leaders have pushed back against the narrative that crypto was disproportionately responsible for the crisis in Israel and Palestine.
This is bad news for those in the crypto industry who value user privacy, as the proposed rule could lead to increased censorship. The policy now opens to a 90 day period for public comment, and it remains to be seen whether or not the rule will be adopted.
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You can read more about this topic here: Decrypt: US Seeks to Label Crypto Mixers as National Security Threats Amid Money Laundering Concerns
