U.S. Treasury drops proposed crypto wallet and mixer reporting rules

What happened

FinCEN is dropping two proposed crypto reporting rules. They would have covered transactions tied to crypto mixers and to self-custodied wallets, and would have applied to banks, crypto exchanges and other financial institutions. The bureau filed both withdrawal notices on Monday, and they are set to be published in the Federal Register on Oct. 6.

The first notice withdraws a 2023 finding that flagged international crypto mixing for money laundering concern under Section 311 of the USA PATRIOT Act, along with the rule proposed with it. Reports would have included wallet addresses, transaction hashes and IP addresses, plus identity records on the customers involved.

The second notice formally pulls a December 2020 proposal aimed at unhosted wallets. Banks and money services businesses would have filed a report when a customer's transaction with such a wallet went above $10,000, or when several added up to more than that within 24 hours, and kept records on those above $3,000. The notice said FinCEN will take no further action on that proposal.

Why it matters

Both notices point to the July 2025 report from the President's Working Group on Digital Asset Markets. The mixer notice quotes a line from it saying the Trump Administration supports the ability of lawful digital asset users to privately transact on a public blockchain. FinCEN also described the withdrawal as part of efforts to make digital asset rules fit-for-purpose.

FinCEN said criminals still use mixers to slow investigators, but that commenters warned a broad definition of mixing could chill legitimate activity and add a large reporting burden. Coin Center, which filed comments against both proposals, called the move a significant victory for financial privacy and a major win. Both notices were signed by FinCEN Deputy Director Jimmy L. Kirby.

What the data shows

• $10,000 was the reporting threshold in the withdrawn unhosted wallet rule. Records would have been kept for transactions above $3,000, and several payments adding up to more than $10,000 within 24 hours would also have triggered a report.

Background

• The unhosted wallet rule dates to December 2020, and Treasury had proposed it as far back as 2020.
• Treasury's regulatory agenda had already listed the unhosted wallet proposal as withdrawn as of April 12, 2024, Monday's filing is the formal notice.
• Coin Center also fought Treasury sanctions on the mixer Tornado Cash, a case that ended in July 2025 when the department dropped its appeal.

What is still unclear

• FinCEN said it would still track mixer use for illicit finance, and it left open that it may take steps later to mitigate that activity.

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