In a stunning display of “better late than never,” the U.S. Treasury has released a report acknowledging that crypto users might want privacy for reasons other than buying a private island with stolen loot.
The Department’s new narrative is a complete 180-degree turn from the days when they acted like Tornado Cash was the root of all evil. It has now admitted that there are many reasons why an ordinary person or business would want to keep their transactions off a public ledger.
It took them years to realize that lawful users need to protect personal wealth from public view, secure business payments from competitors, and keep charitable donations or consumer spending private. Well, this change in language puts lawful privacy use into the official record alongside the risks of illicit finance.
On the flip side, the department maintains that criminals and state-backed groups use mixers to hide stolen funds. Notably, North Korean hackers looted $2.8 billion in digital assets between January 2024 and September 2025. These actors are described as “particularly adept” at using mixers and cross-chain bridges to launder funds before investigators can react.
As a result, the department is drawing a new line between illicit concealment and supervised privacy. Put differently, the government can accept some forms of confidentiality if the service providers remain transparent to the state. This points to a future where privacy tools operate within a regulated U.S. crypto market rather than being treated as inherently suspicious.
To balance this new stance toward privacy, the Treasury is asking Congress for stronger enforcement tools. One major recommendation is a “hold law” that would allow financial institutions to freeze suspicious digital assets during short investigations temporarily.
The department also wants lawmakers to define which actors in the decentralized finance space should be required to follow anti-money laundering rules, ensuring that as privacy grows, oversight remains possible.
Why the sudden change in tone? Look no further than the $1.7 billion that flooded into Bitcoin ETFs in early 2026.
Now that Wall Street is at the party, the Treasury has realized that big banks don’t play well with total transparency. The White House’s 2025 executive orders basically told agencies to stop being a drag on the industry.
The debate has officially shifted from “Is crypto for criminals?” to “How do we make crypto work for BlackRock while still pretending we can catch the hackers?”
Written by Clement Saudu
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