The US government is preparing to bring sweeping anti-money laundering powers from the PATRIOT Act into the crypto sector, in a move that could reshape the boundaries of privacy, compliance, and innovation. According to reporting by The Rage, the Treasury Department is seeking to apply Section 311 of the USA PATRIOT Act—often described as one of the most far-reaching financial surveillance tools—to cryptocurrency activities such as mixers, DeFi protocols, and certain wallet services.

At the center of the initiative is the Financial Crimes Enforcement Network (FinCEN), which is drafting a rule that would formally classify crypto mixing services as a “primary money laundering concern.” Such a designation would give the US Treasury the authority to effectively cut off these services from the US financial system by prohibiting banks, exchanges, and payment processors from transacting with them.

US Revives War On Crypto Privacy

The Rage report notes that this new rule is expected to mirror and expand on the 2022 “mixer rule” FinCEN floated after the sanctioning of Tornado Cash, but with much broader implications. In practice, Section 311 powers allow Treasury to not only blacklist specific entities, but also to ban entire categories of transactions deemed high risk. As the report states: “FinCEN’s proposal would extend the extraordinary powers of the PATRIOT Act into digital assets, placing mixers, DeFi protocols, and even wallet providers squarely in the government’s crosshairs.”

Francis Pouliot, the founder and CEO of Bull Bitcoin, commented via X: “US BUREAUCRATS ATTACK ON BITCOIN USERS PRIVACY. […] The Orwellian scenario may not come to pass entirely, but it’s a signal: if we let them, they will establish that any use of Bitcoin except tracked custodial wallets is ‘suspicious’”.

Lawmakers are also aligning with the Treasury’s

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Author: Jake Simmons