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This is from August 2022, Chainalysis:
Are crypto mixers legal?
Despite their use by criminals, crypto mixers are not explicitly illegal in most jurisdictions. Whether they are compliant, however, is a different question.
In the United States, the Financial Crimes Enforcement Network (FinCEN) has confirmed that individuals and centralized businesses offering custodial mixing services must register as money transmitters under the Bank Secrecy Act (BSA), and have three key obligations:
- register with FinCEN,
- maintain an anti-money laundering and know-your-customer compliance program, and
- meet all applicable reporting and record-keeping requirements.
We aren’t aware of any custodial mixers currently following these rules. And given that privacy preservation is the main reason that many users interact with crypto mixers, it seems unlikely that one could implement these procedures and still retain their users.
There is more interesting info to be found if you use the link, but I think it is quite easy based on these requirements for US prosecutors to operate internationally because American citizens are served with mixer and that case can easily be made. They could just find one single person to have used that. Worst case is that a mixing service really launders tens of millions of stolen funds. But I underlined the part that Chainalysis correctly brought up as the major contradiction: KYC + mixing coins makes zero sense.