Treasury withdraws crypto wallet and mixer proposals in regulatory shift

The U.S. Treasury has made a significant shift in its approach to crypto regulations by withdrawing two long-standing proposals on October 5, 2026. The first proposal, introduced in December 2020, aimed to require banks and money services businesses to keep records for transactions involving unhosted wallets above $3,000 and report transfers above $10,000. The second proposal, introduced in 2023, sought to classify transactions involving convertible virtual currency (CVC) mixers as a primary money laundering concern.

The withdrawal of these proposals has been welcomed by industry groups, as it removes regulatory pressure on self-custodial wallets and reduces compliance burdens for banks, centralized exchanges (CEXs), and decentralized finance (DeFi) activities. The move aligns with the current administration's effort to make digital asset regulations 'fit-for-purpose.' Existing anti-money laundering (AML) rules will remain in force.

Under the withdrawn proposals, financial institutions would have faced additional requirements when customers moved crypto to private wallets. With the proposals withdrawn, there is no new federal requirement forcing banks or exchanges to identify the owner of a self-hosted wallet simply because a customer sends funds there.

The decision marks a major change in how U.S. regulators plan to approach digital asset rules under the Trump administration. The crypto industry now operates without the two proposed reporting frameworks, which is likely to support crypto adoption and wallet privacy.