FinCEN Withdraws Proposed Reporting Rules for Self-Hosted Wallets and Mixers
The U.S. Treasury Department has scrapped two long-standing regulatory proposals that would have imposed new reporting requirements on crypto transfers to private wallets and transactions involving mixers.
The Financial Crimes Enforcement Network, or FinCEN, officially withdrew two proposals on Sunday that had been pending for years. The agency stated that the move aligns with the Trump administration’s deregulatory agenda and its goal of establishing fit-for-purpose rules for digital assets.
One of the withdrawn proposals, which originated in December 2020, would have required banks and money-service businesses to report crypto transfers exceeding $10,000 involving unhosted wallets. This requirement would have applied to individual transactions as well as cumulative transfers over a 24-hour period. Under the proposal, firms would have been obligated to collect identifying information about both the customer and the owner of the wallet on the other side of the transaction.
An unhosted wallet refers to a setup where an individual maintains control over their own private keys rather than relying on a bank or exchange to hold their assets.
FinCEN also scrapped a 2023 proposal that sought to classify crypto mixing transactions as a primary money-laundering concern. That rule would have allowed the government to mandate additional reporting requirements for financial institutions that processed such transactions.
Neither of the proposals had ever taken effect. The 2020 wallet rule had remained unresolved for nearly six years after receiving thousands of public comments.
