The Financial Crimes Enforcement Network (FinCEN) is withdrawing two proposed crypto rules that would have required banks and other financial institutions, including crypto exchanges, to collect and report more data on transactions tied to crypto mixers and self-custodied wallets. The Treasury bureau filed both notices on Monday, and they are scheduled to be published in the Federal Register on Oct. 6.
The first notice withdraws FinCEN’s 2023 finding that international crypto mixing is “a class of transactions of primary money laundering concern” under Section 311 of the USA PATRIOT Act, and the rule it proposed with it. Covered financial institutions would have had to report mixing-linked transactions involving a foreign jurisdiction, with details such as wallet addresses, transaction hashes and IP addresses, and keep identity records on the customers involved.
The second notice formally pulls a December 2020 proposal aimed at “unhosted wallets.” Banks and money services businesses would have had to file a report with FinCEN when a customer’s transaction with such a wallet topped $10,000, or when several added up to more than that within 24 hours, and keep records on those above $3,000. “FinCEN will take no further action on this NPRM,” the notice said.
Get Unchained’s crypto news in your inbox with the free Unchained Daily newsletter.
White House Report Cited
Both notices point to the July 2025 report from the President’s Working Group on Digital Asset Markets. The mixer withdrawal quotes its line that “the Trump Administration supports the ability of lawful users of digital assets to privately transact on a public blockchain.”
The agency kept its concerns about mixers, saying criminals still use them to slow down investigators. But it said the withdrawal reflected commenters’ warnings that the rule defined mixing so broadly it “could have a chilling effect on legitimate activity and place a large reporting burden on covered financial institutions.” Both notices were signed by FinCEN Deputy Director Jimmy L. Kirby.
Formal End to a Shelved Rule
Treasury’s regulatory agenda had already listed the unhosted wallet proposal as withdrawn as of April 12, 2024, Unchained reported that year. Monday’s filing is the formal withdrawal notice.
Coin Center, the crypto policy group that filed comments against both proposals, called the move “a significant victory for financial privacy” in a post by Jason Somensatto. Somensatto argued the rules were still a risk as long as Treasury hadn’t formally dropped them. “Their official withdrawal finally closes that door,” he wrote. The group also fought Treasury’s sanctions on mixer Tornado Cash, a case that ended in July 2025 when the department dropped its appeal.
FinCEN said in the mixer notice that it would still track mixer use for illicit finance and “may take appropriate steps in the future to mitigate any such activity.”
Related Listen: The Chopping Block: Erik Voorhees on AI Privacy, Agentic Payments, and Crypto x Memecoin Mayhem
