US Treasury abandons crypto wallet tracking and mixing proposals

The US Treasury has abandoned a 2020 proposal that would have required banks and exchanges to track transfers involving personal crypto wallets. The rule, which never took effect, aimed to record transactions above $3,000 and report those exceeding $10,000 to the Financial Crimes Enforcement Network (FinCEN). The withdrawal, set to take effect on October 6, aligns with a White House report advocating for the privacy of lawful digital asset users.

FinCEN, the Treasury’s anti-money-laundering bureau, cited the need for 'fit-for-purpose' regulations in its decision. The agency also dropped a 2023 plan targeting crypto mixing, a practice that obscures the origin of funds. While the proposal is scrapped, FinCEN hinted at potential future action against illicit mixing activities.

Developer Roman Storm’s upcoming retrial in April 2027, related to the Ethereum-based mixing service Tornado Cash, highlights ongoing legal scrutiny. Existing reporting requirements, such as suspicious activity reports and sanctions screening, remain in place. Meanwhile, all Bitcoin transactions remain traceable on the public ledger.