Treasury Withdraws Crypto Wallet and Mixer Reporting Proposals

The U.S. Treasury has abandoned a proposed rule that would have required reporting for large cryptocurrency transfers involving self-custody wallets. The Financial Crimes Enforcement Network (FinCEN) withdrew the proposal on October 5, ending a process that began in December 2020. The rule would have mandated banks and money-service businesses to report transfers above $10,000, including combined transactions within a 24-hour period.

FinCEN also dropped a 2023 proposal targeting crypto mixing transactions, which aimed to classify mixing activity as a primary money-laundering concern. Neither proposal became a final rule despite years of public debate and regulatory review. The Treasury stated that the withdrawals align with the administration’s deregulatory agenda and efforts to create digital-asset rules suited to current markets.

Existing anti-money-laundering and crypto reporting requirements remain in effect for covered financial firms. The Treasury continues to use other tools against suspected illicit finance, such as recent sanctions targeting a Russia-linked network. FinCEN can still monitor crypto transactions under existing law and issue new proposals in the future.

Other U.S. agencies are still developing digital-asset rules. The Securities and Exchange Commission (SEC) recently issued a custody proposal addressing how advisers and regulated funds may hold crypto assets. The CFTC is also pursuing crypto trading rules after a market-structure bill failed to advance in the Senate.