FinCEN Drops 2020 Proposal on Crypto Wallet Regulations

The U.S. Financial Crimes Enforcement Network (FinCEN) has officially withdrawn its 2020 proposal aimed at imposing new reporting and recordkeeping requirements for transactions involving user-controlled crypto wallets. According to a statement by Wu Blockchain, FinCEN will take no further action on the proposal, which was initially published on December 23, 2020, and was set to appear in the Federal Register on October 6, 2026.

The proposal sought to mandate that banks and money services businesses report transactions exceeding $10,000 and verify customer identities when these transactions involved self-hosted wallets or certain other covered wallets. Additionally, it required recordkeeping for transactions over $3,000. These rules targeted financial institutions rather than individual users managing their own wallets.

FinCEN explained that the withdrawal aligns with the Trump administration's efforts to streamline digital asset regulations. The proposal was only a draft regulation and had not been enacted as a rule.