The U.S. Treasury Department stated in a new report to Congress that crypto mixers can have legitimate uses for financial privacy, signaling a shift from the agency’s earlier stance when it sanctioned Tornado Cash in 2022.

The 32-page report also presented new findings on money-laundering activity involving stablecoins and cross-chain bridges. Since May 2020, more than $1.6 billion in deposits originating from mixing services have moved into crypto bridges, with over $900 million flowing through a single bridge connected to actors believed to be linked to North Korea.

Additionally, the Treasury encouraged Congress to pass a digital asset “hold law.” This rule would allow financial institutions to temporarily freeze suspicious crypto assets during investigations. The department also called for clearer regulations identifying which participants in decentralized finance ($DEFI ) should be subject to anti-money laundering and counter-terrorism financing (AML/CFT) requirements.