US Treasury withdraws proposed monitoring rules for unhosted wallets and crypto mixing

The US Treasury Department has withdrawn two long-pending cryptocurrency rule proposals tied to so-called unhosted wallets and convertible virtual currency, or CVC, mixing, according to a Coin Center post published on Oct. 5. One proposal would have required financial institutions to collect and retain counterparty information for transactions involving unhosted wallets when the amount exceeded $3,000. Transactions of more than $10,000 would also have triggered a reporting requirement to the Financial Crimes Enforcement Network, or FinCEN. Coin Center said both proposals threatened to sharply expand financial surveillance over crypto users and had remained a latent policy risk as long as they stayed pending. The group described the formal withdrawal as a major win for financial privacy. Coin Center, founded in Washington, D.C. in 2014 by Jerry Brito and Robin Weisman, is one of the city’s earliest crypto policy think tanks and says its mission is to defend the right to build and use open cryptocurrency networks.