The Financial Crimes Enforcement Network has withdrawn two proposed cryptocurrency rules that would have required banks, crypto exchanges and other financial institutions to collect and report additional information on transactions tied to crypto mixers and self-custodied wallets. FinCEN filed the withdrawal notices on Monday, and they are scheduled for publication in the Federal Register on 6 October.
One notice reverses FinCEN’s 2023 determination that international crypto mixing constituted “a class of transactions of primary money laundering concern” under Section 311 of the USA PATRIOT Act.
Crypto mixers combine and redistribute users’ funds, obscuring where cryptocurrency has come from and where it is going. Under the proposed mixing rule, covered institutions would have had to report transactions linked to mixing and involving a foreign jurisdiction. The reports would have included wallet addresses, transaction hashes and IP addresses, while institutions would also have retained identity records for the customers involved.
The other notice ends a December 2020 proposal concerning “unhosted wallets”, another term for wallets controlled directly by users rather than by financial institutions.
That proposal would have required banks and money services businesses to report transactions between their customers and self-custodied wallets when they exceeded $10,000. It would also have applied when multiple transactions rose above that amount within 24 hours. Institutions would have had to keep records of self-custodied wallet transactions above $3,000.
Both withdrawal notices cite a July 2025 report by the President’s Working Group on Digital Asset Markets. The notice on mixing quotes the report’s statement that “the Trump Administration supports the ability of lawful users of digital assets to privately transact on a public blockchain.”
The unhosted-wallet proposal was published on 23 December 2020 and received 7,685 comments. FinCEN initially set 4 January as the comment deadline, reopened the period on 15 January 2021, and extended it again to 29 March 2021. The proposal then remained unfinished for the next five and a half years.
The 2023 proposal on mixing received 2,239 comments.
Coin Center had repeatedly urged the US Treasury Department and FinCEN to withdraw both proposals. It objected to the unhosted-wallet proposal on the grounds that it would create a double standard for cryptocurrency transactions and encourage the gathering of sensitive personal financial information. The group also said the proposed definition of cryptocurrency mixing was extraordinarily broad and could cover common privacy techniques used by ordinary cryptocurrency users.
Coin Center described the withdrawals as a significant gain for financial privacy.
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