The US Treasury’s Financial Crimes Enforcement Network (FinCEN) is zeroing in on crypto transaction mixers.

Released Thursday, FinCEN’s Notice of Proposed Rule Making (NPRM) brands crypto transaction mixing as a “primary money laundering concern.”

The proposal would require regulated financial institutions to report transactions when there is reason to suspect involvement in transaction mixing, particularly concerning activities outside the US.

Mixing is a process that blends different streams of crypto transactions to obscure the original source, thereby making it more difficult to trace individual transactions.

While the proposed rule aims to bolster transparency and curb illicit financial flows, questions remain over its real-world efficacy, particularly given crypto’s inherently decentralized and pseudonymous nature.

The agency’s proposal is part of a broader Treasury offensive against mixing services that began in earnest last year.

Blender.io and Tornado Cash, platforms both implicated in North Korean money laundering activities by US authorities, have spurred regulatory efforts to curb their use.

Read more: Attorneys say DOJ’s Tornado Cash charges contradicted FinCEN guidance

“[Convertible virtual currency] mixing offers a critical service that allows players in the ransomware ecosystem, rogue state actors and other criminals to fund their unlawful activities and obfuscate the flow of ill-gotten gains,” FinCEN Director Andrea Gacki said.

That approach has angered members of the crypto ecosystem. Critics say the Treasury’s Office of Foreign Assets Control, in its fight to clamp down on illicit proceeds, went a step too far — eventually leading to the arrest of a developer and charges against Tornado Cash’s founders.

FinCEN argues its latest proposal aligns with ongoing efforts to counteract a spectrum of threats, from sanctions-dodging countries to groups like Hamas and Palestinian Islamic Jihad.

Don’t miss the next big story – join our free daily newsletter.

Follow Sam Bankman-Fried’s trial with the latest news from the courtroom.