The US Treasury's Financial Crimes Enforcement Network, known as FinCEN, has withdrawn two proposed rules aimed at regulating cryptocurrency services. The agency announced the withdrawal on October 5, 2026, in a notice posted on the Federal Register's public inspection site.
One withdrawn rule would have regulated crypto mixing services, which blend funds from multiple users to obscure transaction origins. The other would have imposed recordkeeping, verification, and reporting requirements on transactions involving unhosted wallets—cryptocurrency wallets that users control directly rather than through banks or exchanges.
Timeline and Rationale
The unhosted wallet rule was first proposed in December 2020. The mixer rule followed in October 2023. FinCEN cited two primary reasons for the withdrawal: concerns that the mixer rule "could have a chilling effect on legitimate activity" and worries that it could "place a large reporting burden on covered financial institutions." The agency said the decision aligns with the Trump administration's deregulatory agenda and efforts to ensure digital asset rules are "fit-for-purpose."
Industry Response
Cryptocurrency advocacy groups expressed support for the withdrawal. The Crypto Council for Innovation called FinCEN's move "positive for the digital asset ecosystem" in a statement posted on X on Monday. Many industry groups had opposed the reporting requirements in both proposals.
The withdrawal follows related regulatory activity. On the same day, Commodity Futures Trading Commission Chair Michael Selig announced that the CFTC would use its "existing statutory authorities" to propose two new rules governing how crypto companies could operate under CFTC oversight.
