FinCEN Withdraws Proposed Crypto Rules Amid Rising Digital Asset Scam Threats
On October 5, 2026, the Financial Crimes Enforcement Network (FinCEN) withdrew two proposed rules targeting digital-asset transactions as part of the Trump Administration’s deregulatory efforts. The first proposal aimed to impose recordkeeping, verification, and reporting requirements for transactions involving convertible virtual currencies and unhosted wallets. The second proposal focused on regulating convertible virtual currency mixing, a practice used to obscure transaction origins. Despite the withdrawal, existing anti-money-laundering obligations under the Bank Secrecy Act remain in effect for covered digital-asset businesses.
The U.S. Department of the Treasury’s 2026 National Money Laundering Risk Assessment, published in March 2026, highlights the ongoing risks associated with digital assets. The report identifies fraud, drug trafficking, cybercrime, and other illicit activities as major money laundering threats, with digital assets increasingly used to facilitate these crimes. Notably, the report cites digital asset investment scams, including so-called “pig butchering” scams, as a significant concern, with reported losses reaching USD 5.8 billion in 2024, a 47% increase from the prior year.
The Treasury’s assessment also ties digital-asset fraud to broader criminal networks, describing cases where proceeds were laundered through shell companies and converted into digital assets, including stablecoins. FinCEN’s decision to withdraw the proposed rules does not alter the existing regulatory landscape, as the Bank Secrecy Act obligations continue to apply. The future of digital-asset regulations remains uncertain, as FinCEN has not indicated whether it plans to revisit these issues through alternative approaches.