FinCEN withdraws proposals on crypto wallets and mixing transactions

The U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN) has withdrawn two proposed rules targeting private crypto wallets and mixing transactions. One proposal would have required financial firms to report crypto transfers above USD 10,000 involving self-custody wallets. The other sought additional reporting on international crypto mixing. FinCEN announced the withdrawals on October 5.

The wallet proposal, dating back to December 23, 2020, aimed to track certain transactions involving self-custody wallets and foreign financial institutions. Firms would have reported transfers exceeding USD 10,000 and kept records for transactions above USD 3,000. The plan included verifying customer identities and collecting detailed transaction information.

FinCEN’s second proposal, from October 23, 2023, focused on international crypto mixing. It defined mixing broadly, including activities like pooling funds and delaying transactions. The agency withdrew both proposals, citing concerns about their broad reach and potential impact on legitimate activities. FinCEN also noted a White House report recognizing lawful uses of mixers for financial privacy.

Neither proposal had taken effect, so the withdrawals do not remove existing requirements for financial institutions. FinCEN stated it will continue monitoring mixers for illegal financial activity and may take further steps in the future. The mixing withdrawal took effect on October 6, 2026.