- House Democrats are planning a bill to target cryptocurrency mixers, aiming to prevent money laundering
- Representative Sean Casten announced the legislation during a securities enforcement practices hearing
- The bill has been co-sponsored by Representatives Brad Sherman, Emanuel Cleaver, and Bill Foster
In a renewed effort to curb money laundering through cryptocurrency mixing services, several Democrats on the House Financial Services Committee are set to introduce a new bill targeting these platforms. Representative Sean Casten, one of the key supporters, announced the forthcoming legislation during a US securities enforcement practices hearing. The bill, which aims to “clamp down on mixers,” is co-sponsored by fellow Democrat Representatives Brad Sherman, Emanuel Cleaver, and Bill Foster, but other party divisions surfaced during the hearing.
Casten Castigates “Money Laundering Channels”
Crypto mixing services have been the subject of legal action in the US and elsewhere in recent months, with the likes of Tornado Cash, Chipmixer, Sinbad, and Samourai shut down and its founders charged with allowing money laundering. According to Casten, the bill assumes these mixers are “money laundering channels” unless proven otherwise through sufficient audit work, emphasizing, “Let’s go through and get that cleaned up and fixed.”
While this bill faces an uncertain path in the Republican-controlled House, it reflects the growing focus on preventing illicit finance in crypto policy discussions. Using a crypto mixing is currently not an illegal act, and, until recently, it wasn’t totally clear that the operation of one constituted a breach of the law either.
The US government’s recent action answers that question, at least relating to charges, with the court system being the ultimate arbiter.
Division Rears its Head
The hearing showcased the stark divide between the two parties on digital asset regulation. While Democrats criticized the crypto industry for resisting meaningful regulation, Republicans like Bill Huizenga highlighted potential overreach by the Securities and Exchange Commission (SEC). Huizenga specifically pointed to allegations of misconduct in the DEBT Box case and the SEC’s increased use of Wells notices as a prelude to enforcement actions against digital asset firms.
Sherman, a vocal critic of the industry, described the sector as a “garden of snakes” and praised recent SEC actions as critical in illustrating the need for robust regulation.
