FinCEN pulls back proposed crypto mixing rule citing regulatory concerns
The US Treasury’s Financial Crimes Enforcement Network (FinCEN) has withdrawn two proposed rules aimed at crypto companies, including one targeting crypto mixing services. In a notice released Monday, FinCEN announced it would scrap a December 2020 proposal that would have imposed strict recordkeeping and reporting requirements on crypto transactions and unhosted wallets. The agency also withdrew a proposal from October 2023 that sought to enforce rules on crypto mixing services, citing concerns that it could chill legitimate activity and create a heavy reporting burden for financial institutions.
FinCEN stated that the decision to withdraw the proposals was part of the Trump administration’s broader deregulatory agenda and efforts to ensure crypto regulations are fit-for-purpose. The move aligns with recent actions by other regulatory bodies, such as the Commodity Futures Trading Commission (CFTC), which is also working to clarify crypto operations without needing new congressional authority.
Industry advocacy groups, including the Crypto Council for Innovation, praised FinCEN’s reversal, calling it a positive step for the digital asset ecosystem. The decision marks the latest in a series of regulatory adjustments as the US government refines its approach to crypto oversight.