The Financial Crimes Enforcement Network, or FinCEN, is withdrawing two proposed crypto rules that would have required banks and other financial institutions, including crypto exchanges, to collect and report more information on transactions tied to crypto mixers and self-custodied wallets.
The U.S. Treasury bureau filed both withdrawal notices on Monday. They are scheduled to be published in the Federal Register on Oct. 6.
FinCEN pulls mixer-related proposal
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, along with the rule proposed alongside that finding.
Under that proposal, covered financial institutions would have been required to report mixer-linked transactions involving a foreign jurisdiction. The reporting would have included details such as wallet addresses, transaction hashes, and IP addresses, and firms also would have had to keep identity records on the customers involved.
FinCEN said it still has concerns about mixers, stating that criminals continue to use them to slow investigators. At the same time, the agency said the withdrawal reflects warnings from commenters that the proposal defined mixing too broadly, which could chill legitimate activity and impose a substantial reporting burden on covered financial institutions.
December 2020 unhosted wallet proposal formally withdrawn
The second notice formally withdraws a December 2020 proposal aimed at unhosted wallets.
That proposal would have required banks and money services businesses to file a report with FinCEN when a customer’s transaction with such a wallet exceeded $10,000, or when multiple transactions added up to more than that amount within 24 hours. It also would have required recordkeeping for transactions above $3,000.
The notice states, “FinCEN will take no further action on this NPRM.”
White House report cited in both notices
Both withdrawal notices point to the President’s Working Group on Digital Asset Markets report released in July 2025.
The mixer notice 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.
Both notices were signed by FinCEN Deputy Director Jimmy L. Kirby.
Formal end to a rule that had already been shelved
Unchained had previously reported that the Treasury Department’s regulatory agenda already listed the unhosted wallet proposal as withdrawn as of April 12, 2024. Monday’s filing serves as the formal withdrawal notice.
Coin Center, the crypto policy group that submitted comments against both proposals, described the move as a significant victory for financial privacy in a post by Jason Somensatto. Somensatto wrote that the rules remained a risk as long as Treasury had not formally dropped them, and that their official withdrawal finally closes that door.
The group also challenged Treasury’s sanctions on mixer Tornado Cash. That case ended in July 2025, when the department dropped its appeal.
FinCEN says it will keep monitoring illicit use of mixers
In the mixer withdrawal notice, FinCEN said it will continue tracking the use of mixers for illicit finance and may take appropriate steps in the future to mitigate such activity.