FinCEN Abandons Proposals on Non-Custodial Wallets and Crypto Mixers
The U.S. Financial Crimes Enforcement Network (FinCEN) has withdrawn two proposals aimed at regulating cryptocurrency transactions involving non-custodial wallets and mixers. Announced on October 5, this decision aligns with the Trump administration's approach to deregulation and adapting rules to the specifics of digital assets.
The first proposal, published in December 2020, required banks and money services businesses (MSBs) to retain information for transactions exceeding $3,000 with non-custodial or certain foreign wallets. For transfers over $10,000, additional reporting to FinCEN was mandatory. The agency has now officially ceased work on this project.
The second proposal, from October 2023, focused on crypto mixers. FinCEN had proposed enhanced recordkeeping and reporting requirements for financial institutions dealing with mixing services, which obscure the source, destination, or amount of a cryptocurrency transaction. The agency withdrew the initiative due to concerns that the broad definition could affect legitimate activities and create significant reporting burdens.
FinCEN's withdrawal coincides with a shift in the U.S. authorities’ stance on privacy tools. In March, the U.S. Treasury acknowledged that crypto mixers can be used by law-abiding users to protect financial privacy. Additionally, in January 2026, Senators Cynthia Lummis and Ron Wyden introduced a bill exempting programmers and non-custodial service providers from obtaining money transmitter licenses.