New legislation is expected to be introduced by House Financial Services Committee Democrats, targeting Bitcoin mixing services. Representative Sean Casten (D-Ill.), a proponent of the bill, announced the legislative effort during a hearing on U.S. securities enforcement practices.

Rep. Casten stated, "The presumption should be that these are money laundering channels," unless they can demonstrate legitimacy through comprehensive audits.

Despite the bill's introduction by House Democrats, its advancement is uncertain, given the current Republican majority in the House. Recent enforcement actions by U.S. authorities against mixers, such as the Tornado Cash case and actions against the developers behind Samourai Wallet, provide a backdrop to the legislative push.

Rep. Casten also highlighted concerns surrounding Tether (USDT), an offshore-issued stablecoin. He cited reports alleging that Tether has been involved in financing activities detrimental to U.S. interests, including purported support for "Russia's war machine" and the funding of Hamas.

While Democrats voiced their criticisms of the industry's "resistance to regulation," with Rep. Brad Sherman (D-Calif.) referring to the industry as "a garden of snakes," Republican lawmakers pointed out what they consider to be an overly aggressive enforcement strategy by the Securities and Exchange Commission (SEC).

Rep. Bill Huizenga (R-Mich.) raised concerns about the SEC's use of Wells notices, which are formal notifications of intended enforcement actions. He also brought attention to the recent DEBT Box scandal involving alleged abuses by SEC lawyers.

The Hearing