The United States Treasury Department acknowledged the legitimate use of mixers, which obfuscate crypto transfers to preserve user privacy, in its report to Congress on “Innovative Technologies to Counter Illicit Finance Involving Digital Assets.” 

“As consumers increase their use of digital assets for payments, individuals may use mixers to maintain more privacy in their consumer spending habits,” the report said. The Treasury report continued:

“Lawful users of digital assets may leverage mixers to enable financial privacy when transacting through public blockchains. For instance, individuals may use mixers to protect sensitive information on personal wealth, business payments or charitable donations from appearing on a public blockchain.”

However, the report also noted the dangers of “darknet” or non-custodial, decentralized mixers. The Treasury said that non-custodial mixers are used for money laundering or shifting illicit funds by cybercriminals, including North Korea-linked hackers.

The authors suggested that custodial mixers, centralized services that take possession of user funds during the process, could provide identifying information that could be used to track users and transaction flows. 

Privacy in crypto became a hot-button issue in 2025, as financial surveillance increases and US lawmakers attempt to impose know-your-customer (KYC) requirements on digital asset service providers and even decentralized finance (DeFi) platforms.

Related: Dash Evolution chain integrates Zcash Orchard privacy pool

DeFi leaders and seasoned investors warn about the threat to privacy

DeFi leaders and advocates sounded the alarm on ambiguous language in the Digital Asset Market Clarity Act of 2025, also known as the CLARITY bill, that could force DeFi platforms to collect identifying information from users.

The bill also lacked sufficient protections for open-source software developers in the US, according to Alexander Grieve, vice president of government affairs at crypto investment company Paradigm.

Former hedge fund manager Ray Dalio also warned that central bank digital currencies (CBDCs), onchain fiat currencies managed by a central banking institution or the government, are coming and pose a major risk to digital privacy.

In an interview with independent journalist Tucker Carlson, Dalio said CBDCs are a “very effective controlling mechanism” for the government. 

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A class action lawsuit has been filed against prediction market Kalshi, alleging that the death carveout in the “Ali Khamenei out as Supreme Leader” market was not properly disclosed to users and that the platform failed to pay out winning trades.

The plaintiffs said that the death carveout policy was “not incorporated into the user-facing rules summary,” and was not displayed in a way that would notify a “reasonable consumer” of the policy or its effects.

“Defendants, themselves, later acknowledged that their prior disclosures were ‘grammatically ambiguous,’” the lawsuit filing said.

Kalshi voided trading positions for the market after the death of Khamenei, the former Iranian Supreme Leader, was confirmed, meaning the market did not resolve to a “yes.”

“We don’t list markets directly tied to death. When there are markets where potential outcomes involve death, we design the rules to prevent people from profiting from death,” Kalshi co-founder Tarek Mansour said.

The plaintiffs characterized the carveout policy as “predatory” and an “unfair” business practice for this specific market. The lawsuit said:

“With an American naval armada amassed on Iran’s doorstep and military conflict not merely foreseeable but widely anticipated, consumers understood that the most likely, and in many cases the only realistic, mechanism by which an 85-year-old autocratic leader would ‘leave office’ was through his death. Defendants understood this as well.”

Mansour also announced reimbursements for users affected by the carveout policy, calculated using the “last traded price” for the market before the death of Khamenei was confirmed. The reimbursement policy also drew significant pushback from users. 

The plaintiffs in the lawsuit say that the methodology and precise timestamps used to calculate the “last traded price” for the prediction market were not disclosed or transparent. 

Related: Kalshi bans US politician over alleged insider trading violation

Kalshi co-founder fires back against lawsuit claims

Mansour maintained that Kalshi was simply adhering to its policy of not allowing “death markets” and said the policy was clearly stated in the market rules.

“Kalshi made no money here and even reimbursed all losses out of pocket. Not a single user walked away losing money from this market,” he said.

The incident came amid trading volumes on prediction markets surging to record highs in 2026, as the platforms gain popularity.

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Public institutions are under pressure to modernize faster than their systems were built to handle. In its recent report, New Tech, New Partners: Transforming development in the digital era, the United Nations Development Programme (UNDP) outlines a model for using blockchains as part of a broader effort to modernize public systems. The publication showcases over 40 pilot projects around the world that apply blockchain technology to improve transparency, speed and accountability of public systems. This ranges from payment infrastructure and social safety nets to climate finance and community-level funding mechanisms, enabled by fundraising platforms, wallets and digital certificates. 

The UNDP uses a pipeline model, which creates purpose-built partnerships that bring governments, blockchain startups and local companies together to solve public sector problems. Institutions get an opportunity to test new tools through small, problem-led initiatives and specific use cases. These tools are implemented on a local level and designed to solve specific problems, such as inefficient payment rails for micro-entrepreneurs or regional ESG control.

In its framework, UNDP treats blockchains as a trusted ledger for coordination and verification. The ability of blockchains to support shared records, traceable transactions and rule-based processes across multiple actors makes them a useful tool for governmental systems. UNDP also makes clear that these benefits are conditional. Poor governance, weak privacy protections and flawed technical design can create serious risks, such as defects in smart contracts or Illicit use of payment systems. The report reaches a pragmatic conclusion: Blockchain can be useful, but only when institutional safeguards are built in from the start and the technology is adopted responsibly with robust oversight.

Central to UNDP's approach is a commitment to platform-agnostic ways of working, which ensures that no single provider or protocol creates new dependencies, and that the digital infrastructure being built today remains open, interoperable, and genuinely in service of people and public purpose.

The report showcases how blockchains can be used to make public institutions more efficient and transparent, with examples from more than 40 countries across payments, financial access, identity systems and climate-related programs. Examples include projects such as crypto wallets for informal business payments, the use of eco-credit tokens and more. The cases also show how digital tools can help institutions extend services in developing nations, where trust is limited and infrastructure is fragmented.

Explore the full UNDP report to see the complete framework, lessons and portfolio of use cases.