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On AML and crypto, specifically mixer services
Been diving into AML regulations for crypto, and the 'travel rule' is a beast. What's catching me is how firms are practically navigating clients who've used mixer services like Tornado Cash pre-sanction. If a significant portion of a client's early $ETH or $BTC holdings went through a mixer before it was flagged, how are you currently assessing that risk without just blanket-rejecting them? Are there specific mitigation steps or enhanced due diligence processes that actually hold water with regulators in that scenario?
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It's a tricky one, especially with the 'pre-sanction' aspect. Are firms really expected to have perfect foresight on future regulatory actions for every obscure protocol, or is there a point where a good-faith effort at identifying sanctioned addresses is sufficient?