Crypto Mixers Hit 32,000 Transactions Post-Crackdown
Illicit crypto users shifted to unlabeled wallets and compliance-focused protocols after the 2022 Tornado Cash crackdown. CCAF researchers found 95% of mixer funding now originates from unlabeled addresses, up from 76% in 2020.
Key Takeaway
Mixer use doubled post-crackdown as illicit users shifted to unlabeled wallets and compliance-focused protocols captured market share.
Crypto mixer transactions reached 32,000 in 2025, double the 16,000 recorded in 2023, according to Cambridge Centre for Alternative Finance researchers Wenbin Wu and Keith Bear. The shift came after US crypto regulators cracked down on Tornado Cash in 2022, when daily transactions fell 97% within days of the ban. The broader mixer market dropped 45% at the time.
Railgun now controls 71% of all mixer transaction volume. Tornado Cash holds 25%, while Privacy Pools accounts for 5%. CCAF researcher Wenbin Wu said the sanctions primarily deterred compliant users while illicit actors adapted. That shows up in the data: 95% of crypto mixer funding now comes from unlabeled wallet addresses, up from 76% in 2020. Wu and Bear noted the transaction behavior shift is consistent with users seeking to avoid identification.
The US Treasury lifted sanctions against Tornado Cash on March 21, 2025. By then, Railgun had already captured the market by screening deposits against flagged address lists. Privacy Pools takes a similar approach by filtering known bad actors.
The screening systems have gaps. Wu and Bear said blacklists are updated only as new exploits are discovered, leaving a window where funds from freshly flagged addresses can still pass through. A 2023 Federal Reserve Bank of St. Louis paper found that 30% of Tornado Cash traffic linked to illegitimate sources, and crypto mixer transactions hit 21,000 in 2024, a 31% jump from the prior year.
This article was written based on reporting from NewsBTC.
