Treasury Abandons Unhosted Wallet and Mixer Surveillance Proposals
The U.S. Treasury Department’s Financial Crimes Enforcement Network (FinCEN) has officially withdrawn two controversial crypto surveillance proposals. The first, introduced in December 2020, aimed to regulate unhosted wallets by requiring banks and money service businesses to track transactions exceeding $3,000 and report those over $10,000. The second, proposed in 2023, sought to label international crypto mixing as a primary money laundering concern under the USA PATRIOT Act.
FinCEN cited concerns that the mixer rule’s broad definition could deter legitimate crypto activity. Both withdrawals align with the White House’s July 2025 digital asset report, which emphasizes the right to private transactions on public blockchains. Coin Center, a crypto policy group, praised the move but noted that the Treasury retains the authority to introduce similar rules in the future.
The unhosted wallet rule would have extended Bank Secrecy Act regulations to personal wallets, raising privacy concerns. The mixer proposal targeted services that obscure transaction trails by pooling and shuffling coins, requiring financial institutions to report related wallet addresses and transaction details. FinCEN indicated it will continue monitoring mixers for illicit finance but will not pursue the proposed rule at this time.