The US Treasury's Financial Crimes Enforcement Network (FinCEN) has withdrawn a 2020 proposal that would have required banks and exchanges to track personal cryptocurrency wallet transfers and file reports with regulators.
Under the abandoned rule, financial firms would have been required to verify customers and maintain records when transfers involving personal, or "unhosted," wallets exceeded $3,000. Transfers above $10,000, or multiple transfers totaling that amount within 24 hours, would have triggered a report to FinCEN.
FinCEN cited a July 2025 White House crypto report in its decision to withdraw the proposal, noting the need to keep digital asset rules "fit-for-purpose." A statement included in the FinCEN filing noted that "the Trump Administration supports the ability of lawful users of digital assets to privately transact on a public blockchain."
The withdrawal takes effect upon publication in the Federal Register on October 6.
Crypto Mixing Rule Also Withdrawn
FinCEN simultaneously withdrew a 2023 proposal that would have required firms to report suspected cryptocurrency mixing activity with foreign connections. Mixing services blend multiple users' coins to obscure the origin of funds.
The agency said public comments on the mixing rule raised concerns that its definition could inhibit legitimate activity. However, FinCEN stated that illicit actors continue to use mixing services and that it may pursue regulatory action in the future.
Existing regulatory obligations remain in effect, including suspicious activity reports and sanctions screening requirements. Additionally, all Bitcoin transactions are recorded on a public ledger, allowing wallet payments to be traced.
Prosecutors continue to pursue mixing-related cases in court. Developer Roman Storm faces a Tornado Cash retrial scheduled for April 2027 related to the Ethereum-based mixing service.
