The United Kingdom's National Crime Agency aims to include crypto coin mixers under money laundering regulations. Crypto mixer tools provide transactions with an extra layer of anonymity, sometimes used for illicit purposes.
The United Kingdom's National Crime Agency seeks to regulate the crypto coin mixers under the country's laws against money laundering.
Coin mixing tools are popular in the decentralized world as they maintain the privacy of transactions. These tools often mix several transactions to obscure the origin of a particular transaction. Then the recipient receives the transactions from a mixing"black box" comprised of hundreds of transactions from various wallets. While privacy-focused, these tools often face regulators' ire as they are also a known way for hackers and criminals to wash their funds.
Gary Cathcart, the NCA's head of financial investigation, claimed that these transaction mixing tools offer a layer of anonymity to criminals that can be used for"churning criminal cash, obscuring its origins and audit trail." Cathcart called upon regulators to bring these open-source mixing tools under money laundering regulations. This would ensure such service providers carry out mandatory Anti-Money Laundering checks and audit transactions passing through their platforms,NCA didn't respond to Cointelegraph's request for comments at the time of publishing.
Another hurdle for regulators is the open-source and decentralized nature of such services, where thtracking and auditing of funds could become a complex task. This issue was highlighted during the Candian Freedom trucker movement, where non-custodial wallet service provider Nunchuck explained that they hold no info on their users, which is by the design of the decentralized tech.