When US regulators cracked down on Tornado Cash in 2022, the idea was straightforward: shut down the tool, and you solve the problem. That didn’t happen.
New research from the Cambridge Centre for Alternative Finance shows that the use of crypto mixers has nearly returned to pre-ban levels. The sanctions, however, were most effective at pushing out not criminals, but ordinary users seeking financial privacy.
Railgun Leads a Rebounding Market
According to CCAF researchers Wenbin Wu and Keith Bear, total crypto mixer transactions reached about 32,000 in 2025—a sharp rise from roughly 21,000 in 2024 and 16,000 in 2023. Usage has climbed steadily since the US Treasury lifted its sanctions against Tornado Cash in March 2025.
Railgun, a protocol that screens deposits against lists of flagged addresses, now handles 71% of all mixer transaction volume. Tornado Cash accounts for about 25% of 2025 transactions, with Privacy Pools making up the remaining 5%.
Both Railgun and Privacy Pools try to filter out known bad actors before funds enter the system. But the CCAF notes a significant gap: blacklists are only updated as new exploits are discovered, leaving a window where funds from newly flagged addresses can still slip through.
Sanctions Deterred Ordinary Users More Than Criminals
The 2022 crackdown caused immediate disruption. Tornado Cash’s daily transactions fell 97% within days, and overall mixer volume dropped 45%. But the impact was uneven.
Wu explained that sanctions “primarily deterred compliant users while illicit actors adapted”—first by moving to other platforms, and later to cross-chain bridges and decentralized exchanges.
Deposit patterns tell a similar story. Before 2022, centralized exchanges—which require identity checks—were a meaningful source of mixer funding. After the ban, those deposits virtually disappeared. By 2025, 95% of all mixer funding came from unlabeled wallet addresses with no known entity ties, up from 76% in 2020.
Most Transactions Now Happen Within a Day
Before the ban, most mixer activity took place more than 24 hours after a wallet was created. That pattern has now reversed. Researchers say this faster behavior is “consistent with users seeking to avoid identification.”
Still, a 2023 Federal Reserve Bank of St. Louis paper found that only about 30% of Tornado Cash traffic could be linked to illegitimate sources—a reminder that privacy tools also serve lawful purposes. Demand, from both sides, never went away.
Frequently Asked Questions
FAQs Crypto Mixing Evolving Criminal Tactics
BeginnerLevel Questions
1 What is crypto mixing
Crypto mixing is a service that pools and scrambles cryptocurrency from many users before sending it back to them The goal is to break the clear public link between the original sender and the final recipient on the blockchain making the funds harder to trace
2 Why would someone use a crypto mixer
People use mixers for two main reasons privacy and obfuscation
3 Is crypto mixing illegal
It depends on the jurisdiction and intent Using a mixer itself isnt automatically illegal but it is heavily scrutinized Using one to launder money evade sanctions or hide proceeds from crime is illegal almost everywhere Many regulators now treat mixers as highrisk money service businesses
4 How are criminals evolving faster than regulations
Criminals are quickly adopting new techniques like
Crosschain mixing Moving funds between different blockchains before mixing
Using decentralized mixers These run on code without a central operator making them harder to shut down
Chainhopping Rapidly exchanging between numerous cryptocurrencies
Exploiting DeFi protocols Using complex decentralized finance transactions to obscure trails faster than laws can be written to address these specific methods
5 Whats a realworld example of criminal use
A common example is ransomware attacks After receiving a Bitcoin ransom hackers will immediately send the funds through a mixer to break the trail before cashing out making it extremely difficult for law enforcement to follow the money
Advanced Practical Questions
6 If mixers provide privacy why are they so controversial
While privacy is a valid concern regulators and law enforcement argue that mixers primary practical use is for laundering illicit funds They view them as a critical weak point that undermines the antimoney laundering safeguards applied to licensed crypto exchanges
7 How do authorities track funds even after mixing
They use advanced blockchain analysis While mixing adds noise its not always perfect