A bill has been introduced in the United States House of Representatives to ban cryptocurrency mixers for two years. Called the Blockchain Integrity Act, it is sponsored by five Democratic congresspeople led by Sean Casten. 

Casten defined a crypto mixer in a statement as a pool that allows users to “generate a new address and withdraw their funds without revealing the link between the depositor and withdrawal addresses.”

The bill would temporarily prohibit financial institutions, including cryptocurrency exchanges, virtual asset service providers and any other registered money service businesses, from accepting funds that had gone through a mixer or to allow funds to be withdrawn directly to the address of a mixer. Every violation would be subject to a civil penalty of up to $100,000.

During the two-year interval, the Treasury Department would compile a report detailing a wide range of information. The report would include an estimated percentage of transactions with mixers that involve illicit finance, legitimate uses of mixers, the capacity of law enforcement to track or prevent transactions and regulatory approaches to mixers taken in other jurisdictions.

Related: Coinbase, Paradigm, others argue crypto mixer rules are a ‘waste of time’

Representatives Bill Foster, Brad Sherman and Emanuel Cleaver are co-sponsors of the bill, which has yet to go to committee. Sherman, who has a long record as a crypto opponent, was quoted by Casten as saying:

“Cryptocurrency’s intention is right there in its name, a form of ‘hidden money.’ […] Terrorist groups, sanction evaders, tax evaders, cyber criminals, etc. all use mixers to obscure their illicit activity.”

The United States has taken action against crypto mixers before. The Treasury’s Office of Foreign Asset Control placed addresses associated with mixer Tornado Cash on its list of Specially Designated Nationals in August 2022, effectively barring U.S. citizens from using it. That move survived a court challenge a year later. The founders of that mixer have been charged with money laundering, sanctions violations and related crimes in the U.S. and the Netherlands.

Privacy cryptocurrency Monero (XMR) has also been under pressure after the European Union introduced new Anti-Money Laundering laws.

Magazine: Tornado Cash 2.0: The race to build safe and legal coin mixers