FinCEN has pulled two cryptocurrency-related regulatory proposals that had remained unresolved for years, removing proposed restrictions involving self-custody wallets and crypto mixing services.
The Financial Crimes Enforcement Network said Sunday that it was withdrawing a rule that would have expanded the information banks and money-service businesses, including cryptocurrency exchanges, needed to collect and report when customers moved significant amounts of digital assets to wallets they personally controlled.
The proposal, initially introduced in December 2020 during the final weeks of Donald Trump’s first presidency, never became effective.
Under the proposed framework, financial institutions and crypto exchanges would have been required to report transfers involving more than $10,000 in cryptocurrency sent to or received from “unhosted” wallets. Multiple transfers could have been combined to reach the $10,000 threshold if they occurred within a 24-hour period.
Businesses also would have needed to obtain information about the customer and the wallet on the receiving or sending side of the transaction.
Unhosted wallets differ from exchange- or bank-controlled wallets because the individual user holds the private keys and directly controls the associated crypto assets.
The measure attracted thousands of comments from the public and remained in regulatory limbo for nearly six years without being finalized.
Crypto Mixer Proposal Also Withdrawn
FinCEN simultaneously abandoned a separate proposal issued in 2023 concerning cryptocurrency mixing. That measure would have designated transactions involving crypto mixers as a class of primary money-laundering concern.
Such a designation could have allowed the government to introduce additional reporting obligations for financial institutions processing transactions connected to mixing services.
FinCEN said the decision to withdraw both proposals reflects the Trump administration’s broader push to reduce regulation and develop digital-asset rules it considers “fit-for-purpose.”
The withdrawals remove two proposals that had remained significant points of uncertainty for the crypto industry, particularly for self-custody users and businesses dealing with privacy-focused transaction tools.
