U.S. Democratic representatives propose the “Blockchain Integrity Act” to ban the use of crypto mixers for two years.
The bill introduced in the United States House of Representatives on May 7th, called the “Blockchain Integrity Act,” proposes a two-year ban on the use of crypto mixers. Sponsored by Democratic Congressman Sean Casten and supported by three members of his party, the proposal aims to enhance tools to combat illicit financial activities associated with the use of digital assets.
A mixer is a service that mixes the digital assets of different users with the goal of enhancing transaction privacy and anonymity. In the case of a mixer, other obfuscation techniques such as onion routing are also utilized.
The objectives of the bill
The bill proposes to prevent financial institutions, cryptocurrency exchanges, and registered money services businesses (MSBs) from accepting transactions that have passed through a mixer. Violation of this prohibition would result in civil penalties of up to $100,000.
During the two-year ban period, the bill requires the U.S. Department of the Treasury, the SEC, the DOJ, and the CFTC to produce a comprehensive report evaluating various aspects of using a crypto mixer. This would include their correlation with illicit activities, the legitimate use of a mixer, the skills required by law enforcement, and the regulations adopted in other jurisdictions.
The passage of the bill remains uncertain due to resistance from conservative members. In particular, Republican lawmakers cite concerns about the potential stifling of innovation and the need for balanced regulation.
