FinCEN Drops Crypto Wallet and Mixer Rules Citing Deregulation

The Financial Crimes Enforcement Network (FinCEN) has rescinded two proposed rules targeting crypto wallets and mixers, citing the Trump administration’s deregulatory agenda. The first rule, proposed in December 2020, aimed to impose record-keeping and identity verification requirements on banks and money service businesses when dealing with self-hosted wallets. Transfers above $10,000, or multiple transfers totaling over $10,000 within 24 hours, would have triggered these measures, with record-keeping starting at $3,000.

The second proposal, from 2023, sought to regulate crypto mixers, which blend coins from multiple users to obscure their origins. The rule would have required financial institutions to report transactions involving mixing with foreign links, including details like wallet addresses, transaction hashes, and IP addresses. FinCEN based this proposal on a finding that international crypto mixing posed a primary money laundering concern.

The Crypto Council for Innovation (CCI) welcomed the withdrawals, calling them positive for the digital asset ecosystem. The CCI had argued that the mixing proposal’s broad definition could have captured legitimate activities and that the wallet rule would have restricted self-hosted wallet use. The decision comes amid legal pressure on privacy-focused crypto services, such as Samourai Wallet, whose co-founders recently pleaded guilty to charges related to mixing services.

Deputy Director Jimmy L. Kirby signed the withdrawal notice, stating that FinCEN will take no further action on the proposals. The bureau considered public comments before making its decision, and the move aligns with a July 2025 White House report from the President’s Working Group on Digital Asset Markets.