The US Treasury Department told Congress in March 2026 that crypto mixers serve lawful users, a written reversal from the agency that sanctioned Tornado Cash four years earlier.

In a report delivered under the GENIUS Act, the department said privacy-preserving tools can shield transaction details tied to personal wealth, business payments or charitable donations. "Mixers can help lawful users shield transaction details tied to personal wealth, business payments, or charitable donations," according to the report.

The acknowledgment is procedural, not permissive. The Treasury paired it with a condition: mixers should be deployed alongside safeguards such as record-keeping. Privacy tools, the report said, "can coexist with compliance measures."

What did the 2026 report actually say?

The filing does three things at once.

• It catalogues legitimate privacy interests on public ledgers, where every transaction sits permanently visible to anyone.
• It names mixers as tools that can serve those interests.
• It insists that legitimate use demands guardrails.

Treasury framed the change around practical consequences. Public blockchains, the agency wrote, are "public by design." That design forces ordinary users — payroll operators, donors, supply-chain buyers — to absorb a transparency cost that criminals do not face.

How big is the illicit side?

The same report documents how North Korean-linked actors continue to rely on mixers. Theft attributed to North Korea reached more than $2.8 billion between January 2024 and September 2025. Separately, the report found that over $1.6 billion in mixer-related deposits moved through cross-chain bridges since May 2020.

That illicit pipeline has not been broken by enforcement alone. Treasury tracks stolen funds routed first through mixing services, then through the bridges that ferry tokens across chains.

How did policy swing from 2022 to 2026?

The distance between the 2022 Tornado Cash designation and the 2026 report is large.

• August 2022: Treasury sanctions Tornado Cash, cutting it off from US persons.
• 2023: The department designates certain mixing services as primary money-laundering concerns.
• March 2025: The Tornado Cash sanctions are lifted after a court ruled that the immutable smart contracts at issue are not property under the relevant statute.
• 2024–2025: FinCEN withdraws two proposed rules — one on mixing transactions, one on unhosted wallets — citing "potential negative impacts on legitimate financial activities."

The reversal has both a judicial and an administrative face. A federal court pulled the legal rug from the 2022 sanction. FinCEN, the Treasury's financial crimes unit, then pulled two proposed rulemakings voluntarily.

What changes for builders?

For developers, a Treasury report citing lawful use is a new reference point in conversations with outside counsel, investors and exchanges. It is not a safe harbor. The 2026 report ties legitimacy to record-keeping, which implies compliant privacy tools will look different from the fully anonymous services of the early 2020s.

Marketing copy that simply calls a service a "mixer" will not survive the new framing. Operators that want access to US banking rails and exchanges will need to surface audit trails or identity attestations that the older generation of mixers refused to provide.

What comes next?

The next test is procedural, not legal. Watch whether the record-keeping language from this report becomes a formal FinCEN rule, and whether the agency returns with narrower proposals after withdrawing its earlier ones. Lawmakers now have the Treasury's own framing in hand as they write anti-money-laundering policy for the next cycle, and any rulemaking will reveal how strictly the agency plans to police the line between privacy and compliance.