US Treasury Drops Proposed Wallet And Crypto Mixer Rules

The U.S. Treasury has moved to withdraw two proposed cryptocurrency rules from 2020 and 2023 that would have expanded financial institutions' reporting and recordkeeping duties for self-custody wallets and mixing transactions, according to CryptoNews.

FinCEN filed two withdrawal notices on Oct. 5, with formal publication scheduled for Oct. 6. Deputy Director Jimmy L. Kirby signed both documents, which cited the Trump administration’s efforts to ensure digital asset regulations are fit-for-purpose, referencing a July 2025 report from the President’s Working Group on Digital Asset Markets.

Wallet Reporting Withdrawal

The December 2020 proposal would have required banks and money services businesses to collect information about certain crypto transfers involving wallets held outside regulated financial institutions. Under the framework, institutions would have kept transaction and counterparty records and verified customer identity when a covered transfer exceeded $3,000, while transactions above $10,000 required a report to FinCEN.

Mixer Designation and Privacy Concerns

In a separate notice, FinCEN withdrew the October 2023 finding that international convertible virtual currency mixing constituted a class of transactions of primary money laundering concern. The bureau acknowledged commenters' concerns that the definition could discourage legitimate activity and impose substantial reporting costs. Coin Center welcomed the decision, calling it a major win for financial privacy after previously challenging the scope and treatment of domestic transactions.

Key facts

• FinCEN filed two withdrawal notices on Oct. 5 regarding 2020 and 2023 crypto rules.
• The abandoned wallet proposal set a $3,000 recordkeeping and $10,000 reporting threshold.
• The 2023 mixing proposal and its underlying money laundering finding were both withdrawn.
• Coin Center welcomed the decision as a victory for financial privacy.