The Financial Crimes Enforcement Network (FinCEN) has withdrawn two proposed rules governing cryptocurrency transactions, one addressing self-custody wallets and another targeting crypto mixing services.
FinCEN cited the Trump administration's "deregulatory agenda" in rescinding the wallet proposal, which had been pending since December 2020. Deputy Director Jimmy L. Kirby signed the notice, which references a July 2025 White House report from the President's Working Group on Digital Asset Markets. The agency stated it considered public comments on both proposals before deciding to withdraw them.
What the Withdrawn Rules Would Have Required
The first withdrawn rule, published on December 23, 2020, would have targeted unhosted wallets—wallets where no bank or financial institution manages transactions for users. Banks and money service businesses would have been required to file reports and verify customer identity when a counterparty used such a wallet and transfers exceeded $10,000, or when multiple transfers totaled more than $10,000 in 24 hours. Record-keeping requirements would have begun at $3,000, and the rule would have covered wallets held at foreign institutions in jurisdictions specified by the agency.
The second proposal, from 2023, would have imposed special measures on crypto mixing—the process of blending coins from multiple users to obscure their origins. FinCEN based this proposal on a finding under section 311 of the USA PATRIOT Act that international crypto mixing constitutes a class of transactions of primary money laundering concern. The rule would have required covered financial institutions to report any transactions they knew or suspected involved foreign mixing, including amounts, wallet addresses, transaction hashes, IP addresses, and full customer identity information.
Industry Response
The Crypto Council for Innovation (CCI), an industry group that had filed comments on the mixing proposal, called both withdrawals "positive for the digital asset ecosystem." The group had warned that the proposal's broad definition of mixing could capture legitimate activity and characterized the withdrawals as evidence that "the rulemaking process working." CCI argued that the wallet rule withdrawal helps prevent regulators from prohibiting or restricting self-hosted wallet use.
The decision comes as privacy-focused crypto services face ongoing legal scrutiny. Samourai Wallet co-founders Keonne Rodriguez and William Lonergan Hill pleaded guilty to charges related to their mixing service, with prosecutors alleging the wallet processed more than $2 billion in illegal transactions and laundered over $100 million. Rodriguez was sentenced to five years in prison and Hill to four years, with the sentencing judge stating Rodriguez had "used his talent to enable fraud."
