FinCEN Withdraws Crypto Wallet and Mixer Reporting Proposals

The U.S. Financial Crimes Enforcement Network has withdrawn two long-pending crypto rule proposals targeting transactions involving self-hosted wallets and cryptocurrency mixing, ending regulatory initiatives first introduced in 2020 and 2023.

FinCEN withdrew both proposals on October 5 after considering public comments. The Treasury bureau tied the decision to the Trump administration’s deregulatory agenda and an effort to make digital-asset regulation more fit for purpose.

The move removes proposed federal reporting requirements at the same time several other jurisdictions are increasing oversight where crypto moves between regulated platforms and user-controlled wallets.

Self-Hosted Wallet Proposal Dropped After Nearly Six Years

The December 2020 proposal would have required banks and money services businesses to collect and retain information about certain transactions involving wallets not hosted by regulated financial institutions.

Transactions above $3,000 would have triggered recordkeeping requirements involving the customer and counterparty, while transfers exceeding $10,000 would have required a report to FinCEN. The original framework also covered wallets hosted by institutions in certain foreign jurisdictions. Treasury introduced the thresholds as an extension of existing Bank Secrecy Act controls.