The U.S. Department of the Treasury’s Financial Crimes Enforcement Network (FinCEN) has withdrawn two proposed rules that would have significantly impacted transactions involving unhosted wallets and convertible virtual currency (CVC). Effective October 6, 2026, the withdrawal applies to both the 2020 and 2023 notices of proposed rulemaking (NPRM).
The first NPRM, issued in December 2020, aimed to impose verification, recordkeeping, and reporting obligations under the Bank Secrecy Act (BSA) on transactions between hosted and unhosted wallets involving CVC or digital assets with legal tender status (LTDAs). The second NPRM, released in October 2023, would have required additional reporting and recordkeeping for transactions involving CVC mixing within or involving a foreign jurisdiction.
FinCEN withdrew the proposed rules in response to comments received and as part of the Trump Administration’s deregulatory agenda. The 2023 NPRM was formally withdrawn, including the finding that international CVC mixing is a primary money laundering concern. FinCEN cited a July 2025 report by the President’s Working Group on Digital Asset Markets, which acknowledged concerns about illicit use of mixers but noted that lawful actors could use them for financial privacy.
The withdrawal of the 2020 NPRM was supported by the Trump administration’s efforts to ensure digital asset regulations are “fit-for-purpose,” as stated in the July 2025 report. Because the proposed rules did not become final, their withdrawal does not impact existing BSA or related anti-money laundering (AML) requirements for financial institutions.