The Financial Crimes Enforcement Network (FinCEN) has filed notices to withdraw two long-stalled cryptocurrency surveillance proposals. The agency is scrapping a 2020 rule targeting unhosted wallets and a 2023 plan to designate international crypto mixing as a primary money laundering concern.
These withdrawal notices were filed on Monday and are scheduled for publication in the Federal Register on Tuesday. The decision follows a July 2025 White House report that urged the Treasury to reconsider these measures to support the ability of lawful users to transact privately on public blockchains.
Key facts
- FinCEN filed withdrawal notices on Monday for the 2020 unhosted wallet rule and the 2023 mixer designation proposal.
- The notices are set to be published in the Federal Register on Tuesday.
- The 2020 rule would have required financial institutions to report certain crypto transactions above $3,000 and $10,000 involving unhosted wallets.
- The 2023 proposal defined mixing broadly, potentially covering pooled funds, split transfers, and asset swaps.
- A July 2025 White House report urged the Treasury to reconsider the rules, citing privacy rights for lawful users.
- FinCEN stated it will continue to monitor for money laundering and terrorist financing despite withdrawing the specific proposals.
Why it matters
The withdrawal prevents financial institutions from facing potential paperwork burdens and collateral consequences for innocent users, such as account restrictions or closures, which critics argued would result from the broad definitions in the proposed rules.