FinCEN Withdraws Crypto Mixing Finding and Proposed Reporting Rule

FinCEN has announced the withdrawal of its finding that international convertible virtual currency mixing constitutes a class of transactions of primary money laundering concern, together with the associated proposed reporting rule. The notice is scheduled for Federal Register publication on 6 October 2026, following the agency’s announcement on 5 October. It cites concerns about legitimate activity and the reporting burden created by the proposed definition. The decision removes this particular regulatory initiative while leaving a separate question for financial institutions: how to assess potentially concealed flows without treating every demand for privacy as evidence of crime.

FinCEN crypto mixing withdrawal ends the 2023 proposal

The withdrawn initiative originated with a proposal published on 23 October 2023 under section 311 of the USA PATRIOT Act. FinCEN had selected special measure one, a mechanism for additional records and reports, rather than proposing a general prohibition on using privacy tools. The distinction matters when describing the reversal. Financial institutions were being asked to prepare for a possible reporting framework; customers were not subject to a final rule created by this proposal.