FinCEN Drops Crypto Wallet and Mixer Reporting Proposals
The U.S. Financial Crimes Enforcement Network (FinCEN) has withdrawn two proposed crypto rules targeting self-hosted wallets and cryptocurrency mixing, ending initiatives that had been under consideration for years. The agency announced the decision on October 5, citing a push to streamline digital-asset regulation and align with deregulatory efforts from the Trump administration.
The first proposal, introduced in December 2020, aimed to require banks and money services businesses to collect and retain information about transactions involving self-hosted wallets. Transactions above $3,000 would have triggered recordkeeping requirements, while transfers exceeding $10,000 would have required reporting to FinCEN. The withdrawal removes this framework before it took effect but does not limit FinCEN's existing anti-money-laundering authorities.
The second proposal, from October 2023, targeted cryptocurrency mixing, identifying it as a primary money laundering concern under the USA PATRIOT Act. The rule would have required financial institutions to report transactions involving mixers, particularly those linked to ransomware groups and sanctioned actors. FinCEN formally classified the rulemaking as withdrawn on October 5.
Coin Center, a crypto policy group that opposed both initiatives, celebrated the decision as a victory for financial privacy. The group had argued that the wallet proposal would collect unnecessary information about non-customers, while the mixer framework could have captured legitimate privacy-preserving activities.