US Treasury Drops Proposed Crypto Wallet and Mixing Service Rules
The US Treasury Department’s Financial Crimes Enforcement Network (FinCEN) has scrapped two proposed rules aimed at expanding surveillance of unhosted cryptocurrency wallets and mixing services. The move aligns with the current administration’s regulatory direction and responds to concerns raised by public commenters.
The first rule, proposed in 2020, would have required banks and financial institutions to report transactions exceeding $3,000 and $10,000 involving unhosted wallets. The second targeted foreign cryptocurrency mixing services, mandating reporting of related transactions. FinCEN cited excessive reporting burdens and potential stifling of legitimate economic activity as reasons for the withdrawal.
The Coin Center, a prominent opponent of the proposals, celebrated the decision as a “major victory” for financial privacy in the crypto sector. Meanwhile, FinCEN reassured that the withdrawal does not mean abandoning oversight, emphasizing continued monitoring of mixing services to prevent money laundering and other financial crimes.
The decision reflects the growing momentum in the digital asset landscape, where privacy and user data protection remain key priorities.