How a crypto mixer works
A custodial mixer takes deposits into its own addresses, shuffles them and sends other coins to the addresses its users name, minus a fee and often after a random delay. The user has to trust the operator not to keep the funds or its records.
A non-custodial mixer is a smart contract. A user deposits a fixed amount and later withdraws it to a fresh address, with a cryptographic proof that a deposit was made which does not show which one. CoinJoin is a third form: several users build one joint transaction whose outputs cannot be matched to its inputs.
Crypto mixers and US sanctions
The US Treasury's Office of Foreign Assets Control (OFAC) sanctioned a mixer for the first time on 6 May 2022, Blender.io, and on 8 August 2022 sanctioned Tornado Cash, a mixer on Ethereum.
On 26 November 2024 the US Court of Appeals for the Fifth Circuit held, in Van Loon v Department of the Treasury, that Tornado Cash's immutable smart contracts are not property that can be blocked, and that OFAC had overstepped its authority. The Treasury removed the sanctions on Tornado Cash on 21 March 2025.
What crypto mixers mean for a crypto business
A deposit that traces back to a mixer is a red flag whatever the sanctions position. Blockchain analytics tools label mixer addresses, and a platform's policy sets what follows: questions to the customer about the source of funds, a hold, a refusal or a suspicious activity report.
Crypto mixer or privacy coin?
- Privacy coin
- A crypto-asset whose own ledger hides amounts or addresses. A mixer adds privacy to a transparent ledger such as Bitcoin's or Ethereum's.
- Exchange
- Also pools customers' funds, but identifies every customer and keeps records for the authorities.
Where a crypto mixer shows up in a platform
Modules that do the work
- Compliance reportingTransaction monitoring, the Travel Rule and regulatory reports, ready for your regulator.
- KYC / AMLIdentity checks, screening and ongoing monitoring, with the verification provider you choose.
- Fraud & riskReal-time fraud scoring, limits and case management, with the risk engines you already trust.
Platforms that need it
Where it is written
The laws and standards this page's facts come from.
- US Treasury, First-ever sanctions on a virtual currency mixer (Blender.io), 6 May 2022
- US Treasury, Sanctions on virtual currency mixer Tornado Cash, 8 August 2022
- US Court of Appeals for the Fifth Circuit, Van Loon v. Department of the Treasury, No. 23-50669, 26 November 2024
- US Treasury, Tornado Cash Delisting, 21 March 2025
General information, not legal advice: what applies to you depends on your services and your market.