FinCEN Withdraws Crypto Surveillance Rules in Privacy Victory
The Financial Crimes Enforcement Network (FinCEN) has withdrawn two proposed crypto surveillance rules, marking a significant shift in financial privacy. The bureau, part of the Treasury Department, announced it would no longer pursue rules requiring banks and exchanges to report users who mix cryptocurrencies or manage their own wallets. This decision comes after a report from the President’s Working Group on Digital Asset Markets released in July 2025 emphasized protecting users' right to transact privately.
The first proposal, introduced in 2023, aimed to classify international crypto mixing as a primary money laundering concern under the USA PATRIOT Act. The second proposal, from December 2020, sought to mandate reporting for transactions over $10,000 with self-custody wallets. Both proposals were formally withdrawn, with the notices set to be published in the Federal Register on October 6. Coinbase’s stock rose about 3% to $188 following the news, while Bitcoin’s price dipped slightly to around $85,690.
Despite the withdrawal, existing anti-money-laundering measures for exchanges like Coinbase remain unchanged. Coinbase must still perform identity checks, maintain an anti-money-laundering program, and file suspicious activity reports. FinCEN indicated it may take future actions against specific foreign mixers, retaining its authority to impose regulations if necessary.
The decision primarily benefits users of self-custody wallets and privacy-focused services. While advocates celebrate the win for financial privacy, the long-term impact remains uncertain, as FinCEN’s ability to reintroduce regulations looms in the background.