FinCEN Withdraws Crypto Wallet and Mixing Rules After Public Feedback

The Financial Crimes Enforcement Network (FinCEN) has withdrawn two proposed rules that would have imposed new requirements on certain digital asset transactions. The first proposal aimed to mandate financial institutions to record and report transactions involving unhosted wallets, which are wallets held outside of financial institutions. It also included provisions for verifying identities in such transactions.

The second proposal focused on crypto mixing, a process that obscures the links between transactions. FinCEN did not announce any replacement rules in its withdrawal notice. The decision came after considering public feedback, with the withdrawals officially announced on October 5.