Treasury Drops Crypto Wallet and Mixer Proposals in Major Regulatory Shift

The U.S. Treasury has withdrawn two key proposals related to crypto self-custody wallets and mixing services, ending years of regulatory uncertainty. On October 5, 2026, the Treasury’s Financial Crimes Enforcement Network (FinCEN) announced it would take no further action on these proposals, marking a significant shift in the Trump administration’s approach to digital asset regulations.

The first proposal, introduced in December 2020, aimed to require banks and money services businesses to keep records for transactions involving unhosted wallets over $3,000 and report transactions above $10,000. It also sought to collect and verify information about customers using private wallets. The second proposal, introduced in 2023, targeted crypto mixing services, aiming to classify them as a primary money laundering concern.

The crypto industry has welcomed the Treasury’s decision, with groups like the Digital Chamber praising the removal of regulatory pressure around self-custodial wallets. FinCEN stated that the withdrawal aligns with efforts to make digital asset regulations more “fit-for-purpose.” However, existing anti-money laundering (AML) and financial rules remain in place.

With the proposals withdrawn, financial institutions are no longer required to identify the owner of a self-hosted wallet simply because a customer sends funds there. This decision leaves the crypto industry without the proposed reporting frameworks, offering more flexibility for self-custody solutions.