FinCEN announced the removal of two long-standing regulatory initiatives that targeted self-custodial crypto wallets and mixing services, marking a significant shift in the U.S. approach to digital-asset oversight.
Details of the withdrawn proposals
The first proposal, introduced in December 2020, would have extended Bank Secrecy Act requirements to personal crypto wallets. Under that plan, banks and money-services businesses would have been obligated to retain records of any transaction involving a self-custody wallet that exceeded $3,000 and to file reports for amounts above $10,000, including information about the counterparties involved.
The second initiative, issued in 2023, sought to classify cross-border crypto mixing as a “primary money-laundering concern” under the USA PATRIOT Act. Had it taken effect, financial institutions would have needed to report details such as wallet addresses, transaction hashes and originating IP addresses linked to suspected mixing activity.
Both notices were slated for publication in the Federal Register but were withdrawn before finalization. FinCEN cited feedback that the mixer definition was overly broad and could suppress lawful activity, and it referenced the July 2025 White House digital-asset report, which emphasizes support for private transactions on public blockchains.
Industry reaction
The policy group Coin Center, which has long opposed the two rules, praised the withdrawals. Its executive director highlighted the outcome as a “bright spot” amid broader privacy challenges, while cautioning that the Treasury retains the statutory power to propose similar measures in the future.
Other stakeholders, including consumer-protection regulators, have previously floated related ideas—such as the CFPB’s draft rule that would have brought wallets like MetaMask under traditional payment-law frameworks—demonstrating ongoing tension between privacy advocates and regulators seeking greater visibility into crypto flows.
Outlook and next steps
FinCEN stated it will continue to monitor mixing services for illicit activity and may revisit the issue later. The agency’s decision to step back for now does not preclude future rulemaking, and the broader regulatory landscape remains fluid as lawmakers and agencies balance anti-money-laundering goals with the desire to preserve legitimate crypto use.
Why it matters
The retreat from these two proposals temporarily eases compliance burdens for exchanges, custodians and users of self-custodial wallets, while also preserving the ability of mixers to operate without an immediate labeling as a national-security threat. However, the underlying authority remains, meaning future rules could re-emerge, keeping the crypto community vigilant about potential regulatory shifts.
