Two proposals focused on private cryptocurrency wallets and mixing transactions have been rescinded by the U.S. Treasury’s Financial Crimes Enforcement Network. One of the canceled initiatives would have mandated that financial institutions report specific cryptocurrency transfers exceeding USD 10,000 that involved self-custody wallets.
The second measure aimed to mandate additional reporting regarding international crypto mixing. FinCEN made the announcement regarding the withdrawals on October 5, noting that neither proposal had ever been implemented.
FinCEN Drops Reporting Proposal for Private Crypto Wallets
Originally introduced on December 23, 2020, during the closing weeks of President Donald Trump’s first administration, the wallet proposal applied to specific transfers, deposits, withdrawals, and exchanges processed through banks or money services businesses, such as crypto exchanges.
The framework would have required firms to submit reports to FinCEN for any covered transactions surpassing USD 10,000, as well as for multiple transactions that collectively exceeded USD 10,000 within a 24-hour window. These filings would have required details concerning the customer, the transaction itself, and the counterparty.
A distinct threshold was established for recordkeeping purposes. For transactions above USD 3,000, banks and money services businesses would have been required to retain customer and counterparty data, along with verifying customer identities—obligations separate from the proposed reporting duty.
Self-custody wallets enable individuals to manage their private keys independently without depending on a bank or exchange. Furthermore, the proposal extended to specific wallets maintained at foreign financial institutions operating outside the scope of Bank Secrecy Act regulations, with FinCEN responsible for designating the specific foreign jurisdictions covered.
Crypto Mixer Proposal Also Faces Withdrawal
Introduced subsequently on October 23, 2023, FinCEN’s second initiative sought extra records and reports whenever financial institutions had knowledge or suspicion that transactions involved international crypto mixing. Mixing obscures the origin, destination, or value of transfers by combining or restructuring them.
The draft defined mixing expansively, citing examples such as pooling funds, fragmenting transfers, utilizing temporary wallet addresses, and delaying transactions. It also encompassed exchanges between digital assets, thereby stretching beyond platforms typically classified as mixers.
Under the plan, financial institutions would have needed to disclose transaction amounts, asset categories, wallet addresses, and transaction identifiers, alongside customer identity information. FinCEN has now pulled both the proposal and the corresponding finding that designated international mixing as a primary money-laundering concern.
In its withdrawal documentation, FinCEN pointed to worries regarding the expansive scope of the definition and the reporting burden placed on firms. Industry commenters had cautioned that the rule could produce ‘a chilling effect on legitimate activity.’ Additionally, the agency referenced a July 2025 White House report acknowledging the lawful applications of mixers for financial privacy.
Withdrawals End Proposals as FinCEN Keeps Monitoring Mixers
FinCEN stated that it evaluated public feedback prior to canceling both measures. The agency connected its choice to the Trump administration’s ‘deregulatory agenda’ and initiatives aimed at ensuring digital-asset regulations remain ‘fit-for-purpose.’ The dual announcements were released on October 5 to address both pending rules simultaneously.
Because neither measure advanced to a final rule, the cancellations do not eliminate current mandates for financial institutions. Instead, they terminate these specific attempts to impose new requirements on wallet transfers and mixing transactions, leaving banks and crypto enterprises subject solely to their pre-existing compliance responsibilities.
The notice regarding wallets specifies that FinCEN will pursue no further action on that framework. Conversely, the withdrawal of the mixing rule went into effect on October 6, 2026. FinCEN noted that it will continue tracking mixers for illicit finance, including money laundering and terrorist financing, and may pursue additional measures to counter such threats moving forward.
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