FinCEN Abandons Crypto Mixer and Unhosted Wallet Reporting Rules

The Financial Crimes Enforcement Network (FinCEN) has withdrawn two proposed crypto regulations that aimed to increase reporting requirements for banks and financial institutions. The first rule, proposed in 2023, targeted crypto mixers, requiring detailed transaction reports involving foreign jurisdictions. The second, from 2020, focused on unhosted wallets, mandating reports for transactions exceeding $10,000.

Both notices cite a July 2025 White House report supporting privacy for lawful digital asset users. FinCEN acknowledged concerns that the mixer rule was too broad and could burden financial institutions. The unhosted wallet proposal was formally withdrawn, ending a process that had been shelved since April 2024.

Coin Center, a crypto policy group, celebrated the move as a win for financial privacy. The group had previously opposed both proposals and challenged Treasury’s sanctions on mixer Tornado Cash. FinCEN indicated it would continue monitoring mixer use for illicit activities but took no further action on the withdrawn rules.