Treasury Withdraws Crypto Surveillance Rules Boosting Privacy
The U.S. Treasury has withdrawn two proposed cryptocurrency surveillance rules, marking a significant step for crypto privacy. The Financial Crimes Enforcement Network (FinCEN) announced it would pull back rules targeting crypto mixers and self-custody wallets. Mixers, which obscure cryptocurrency transactions, had been proposed as a primary money laundering concern in 2023. The self-custody wallet rule, aimed at transactions over $10,000, was already withdrawn in 2024 but was formally ended with this announcement.
Deputy Director Jimmy L. Kirby signed the withdrawal notices, set for publication on October 6. The decision follows a report from the President’s Working Group on Digital Asset Markets, which emphasized protecting users' right to transact privately. Coinbase’s stock rose 3% to $188 after the news, while Bitcoin’s price dipped less than 1% to around $85,690.
Despite the withdrawals, exchanges like Coinbase must still comply with existing anti-money-laundering measures. FinCEN noted it may take future action against mixers if they hinder investigations. Jason Somensatto of Coin Center celebrated the end of the wallet rule, calling it a victory for financial privacy. However, FinCEN retains authority to impose regulations on mixers in the future.
The changes primarily benefit users of self-custody wallets and privacy-focused services. Most investors buying Bitcoin through regulated exchanges will see no practical changes, as identity checks and reporting requirements remain unchanged.