The US Treasury has withdrawn two proposed rules that would have extended financial surveillance to self-custody crypto wallets and crypto mixing.
The Financial Crimes Enforcement Network, the Treasury’s anti-money laundering arm, posted withdrawal notices for both on Monday for publication in the Federal Register. On each, FinCEN said it “will take no further action.”
The two rules
The first, proposed in December 2020, targeted so-called unhosted wallets, the self-custody wallets people control without an exchange or bank. It would have required banks and money services businesses to keep records on transactions with those wallets above $3,000, and to report transactions above $10,000 along with counterparty information. In effect, it would have pulled personal wallets into Bank Secrecy Act reporting.
The second, proposed in 2023, would have designated international crypto mixing a “primary money laundering concern” under the USA PATRIOT Act. Firms would have had to report wallet addresses, transaction hashes and IP addresses linked to suspected mixing.
Why they were dropped
FinCEN said the mixer rule’s “expansive definition of CVC mixing” risked placing a large reporting burden on financial institutions, and commenters warned it could chill legitimate activity.
Both withdrawals cite the White House’s July 2025 digital asset report, which backed the ability of lawful users to transact privately. FinCEN acknowledged that “lawful users of digital assets may leverage mixers to enable financial privacy.”
Peter Van Valkenburgh, executive director of the advocacy group Coin Center, welcomed the move. “It’s been a hard month for privacy and your right to use crypto. There’s a bright spot,” he said.
What has not changed
Withdrawing a proposal does not remove the power behind it. Coin Center cautioned that the statutory authority to bring forward similar rules remains in place.
FinCEN also made clear it is not stepping away from mixers entirely. It said it will continue to monitor mixer activity for signs of illicit finance and may take steps to address it in future.
