US Treasury Official Says Crypto Mixers Are a ‘Concern’ in Enforcing Sanctions

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Elizabeth Rosenberg, the deputy secretary for terrorist financing and financial crimes at the US Treasury Department, suggested that sanctions on cryptocurrency mixers could bolster the government’s response to foreign entities seeking to use digital assets for illicit means.

During a hearing on Tuesday by the Senate Banking Committee on sanctions against Russia, Rosenberg said it could be an effective way to signal that the US government acted to add crypto mixers such as Blender.io or Tornado Cash to the list. of Specially Designated Nationals. prevent entities from circumventing sanctions.

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“When [sanctions] can serve as a deterrent to any criminal who would attempt to use a mixer to launder their money […] that’s an effective way we can use to signal that we don’t tolerate money laundering,” Rosenberg said. “Whether that’s for a Russian criminal actor, an Iranian, a North Korean or wherever they come from.”

She added:

“Anonymity-enhancing technology like mixers […] are indeed a concern to understand and figure out the flow of illegal financing.”

Elizabeth Rosenberg to Address the U.S. Senate Banking Committee on Tuesday

Rosenberg responded to questions from Massachusetts Senator Elizabeth Warren, who said some in the crypto space were “furious” over Treasury sanctions mixers and suggested Russian oligarchs could use digital assets to avoid efforts aimed at economic influencing. of individuals and entities associated with the war against Ukraine. Many in the space have criticized Treasury’s actions, including Coinbase – the crypto exchange announced on Sept. 8 would file a lawsuit against the State Department challenging sanctions on Tornado Cash.

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Related: US Treasury Sanctions Iran-based Ransomware Group and Associated Bitcoin Addresses

In addition to blenders including Blender.io and Tornado Cash, Treasury targeted specific Bitcoin (BTC) addresses in September that are allegedly linked to individuals in a Russian neo-Nazi paramilitary group and an Iran-based ransomware group. Amid criticism and uncertainty among crypto users, Treasury later clarified that no one was prohibited from sharing Tornado Cash’s code on websites or publications.

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