A U.S. Treasury Department official says crypto mixers are a “concern” in sanctions enforcement

Elizabeth Rosenberg, the US Treasury Department’s Assistant Secretary for Terrorist Financing and Financial Crimes, suggested that sanctioning cryptocurrency mixers could help strengthen the government’s response to foreign companies looking to use digital assets for illicit purposes.

In a Senate Banking Committee hearing Tuesday on sanctions against Russia, Rosenberg said the Treasury Department’s inclusion of cryptomixers like Blender.io or Tornado Cash on its list of Specially Designated Nationals could be an effective way to signal the US government that it is taking action to stop companies from evading sanctions.

“When [sanctions] can act as a deterrent to any criminal attempting to use a blender to launder their funds […] It’s an effective way we can use to signal that we cannot tolerate money laundering,” Rosenberg said. “Whether for a Russian criminal, an Iranian, a North Korean, or wherever they may be from.”

She added:

“Anonymity-promoting technologies like blenders […] are indeed a concern in understanding and combating the flow of illicit finance.”Elizabeth Rosenberg speaks before the US Senate Banking Committee on Tuesday

Rosenberg responded to questions from Massachusetts Sen. Elizabeth Warren, who said some in the crypto space were “angry” about the Treasury Department’s sanctioning of mixers and suggested that Russian oligarchs could use digital assets to avoid efforts that aim to economically harm individuals and organizations associated with the war against Ukraine. Many around the world have criticized the Treasury Department’s actions, including Coinbase — the crypto exchange announced on Sept. 8 that it would fund a lawsuit against the government department challenging sanctions against Tornado Cash.

Related: The US Treasury sanctions an Iran-based ransomware group and associated bitcoin addresses

In addition to blenders like Blender.io and Tornado Cash, the Treasury Department in September targeted certain Bitcoin (BTC) addresses allegedly linked to individuals from a Russian neo-Nazi paramilitary group and an Iran-based ransomware group. Faced with criticism and uncertainty among crypto users, the Treasury later clarified that no one is prohibited from sharing Tornado Cash’s code on any website or publication.

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