FinCEN Withdraws Crypto Mixer and Unhosted Wallet Proposals

The Financial Crimes Enforcement Network (FinCEN) has officially withdrawn two proposed rules targeting the crypto industry. The first proposal, introduced in December 2020, aimed to impose recordkeeping and reporting requirements on transactions involving unhosted wallets. The second, proposed in October 2023, sought to regulate crypto mixing services, which obscure the origin of digital assets. FinCEN cited concerns that the mixer rule could stifle legitimate activities and create unnecessary reporting burdens for financial institutions.

In its announcement on October 5, 2026, FinCEN stated that the decision aligns with the Trump administration’s deregulatory agenda. The agency also emphasized the need for digital asset rules that are “fit-for-purpose.” The move follows a review of public feedback on both proposals, which ultimately led to their withdrawal. The notice was posted on the Federal Register’s public inspection site, indicating that neither proposal will proceed further.

Industry groups have reacted positively to the decision. The Crypto Council for Innovation called the move “positive for the digital asset ecosystem.” The withdrawal comes amid broader efforts by U.S. agencies to refine their approach to crypto regulation, with the Commodity Futures Trading Commission (CFTC) also announcing new rule proposals under existing authorities.