Coin mixers, such as Tornado Cash and Bitcoin Fog, are services utilized to obfuscate the origin and destination of cryptocurrency transactions. Users deposit crypto into these mixers, which pool funds from multiple users, and then withdraw mixed coins to hide their transaction sources. While privacy advocates claim these services are essential for anonymity—especially for journalists and activists—law enforcement views them as tools for money laundering. Tornado Cash was sanctioned in 2022 by the U.S. Treasury for its connection to criminal activity, having facilitated over $7 billion in transactions, many linked to illicit activities. A pivotal court ruling in November 2024 determined that the immutable smart contracts of Tornado Cash cannot be classified as property, challenging the legality of such sanctions. In early 2025, the Treasury lifted its sanctions against Tornado Cash amid evolving legal interpretations of crypto mixers. As the debate around privacy and regulatory measures continues, new projects like Railgun are working to provide privacy without crossing legal boundaries, attempting to ensure compliance while safeguarding user privacy.

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