TLDR
- U.S. Treasury withdrew a proposed rule covering large crypto transfers involving self-custody wallets.
- FinCEN’s 2020 proposal would have required reporting for transfers above $10,000.
- The agency also scrapped a 2023 proposal targeting transactions linked to crypto mixers.
- Neither proposal became a final rule, despite years of public debate and regulatory review.
- Existing anti-money-laundering and crypto reporting requirements remain in effect for covered financial firms.
The U.S. Treasury has withdrawn a plan that would have expanded reporting for large crypto transfers involving self-custody wallets. FinCEN withdrew the proposal on October 5, ending a rulemaking process that began in December 2020. The measure never took effect.
The proposal would have required banks and money-service businesses to report crypto transfers above $10,000. It also covered transactions that crossed that level when combined within 24 hours. Firms would have collected customer details and information about the wallet on the other side.
FinCEN Drops Unhosted Wallet Proposal
Other U.S. agencies continue writing digital-asset rules. The SEC recently issued a custody proposal that addresses how advisers and regulated funds may hold crypto assets. It includes limited cases where advisers could use self-custody.
FinCEN’s 2020 plan focused on unhosted wallets, where users control their private keys directly. The rule drew thousands of comments. After nearly six years without a final rule, the agency removed the proposal from its regulatory agenda.
Crypto Mixer Proposal Also Withdrawn
FinCEN also withdrew a 2023 proposal covering crypto mixing transactions. The plan sought to classify mixing activity as a primary money-laundering concern. The plan could have required financial institutions to file extra reports for transactions connected to mixing services.
The change arrives while the CFTC is pursuing CFTC crypto trading rules after a market-structure bill failed to advance in the Senate. Those proposals focus on leveraged, margined and financed crypto trading. Existing authorities divide oversight of spot crypto markets.
U.S. Crypto Oversight Keeps Changing
The U.S. Treasury said the withdrawals support the administration’s deregulatory agenda and its goal of creating digital-asset rules suited to current markets. The move does not remove anti-money-laundering duties for banks, exchanges or other covered financial firms.
Treasury continues to use other tools against suspected illicit finance. In a recent Treasury sanctions action, officials targeted a Russia-linked network accused of moving funds for sanctioned actors. FinCEN also proposed restrictions on transfers involving named sub-agents connected to that network.
The wallet and mixer proposals now leave the rulemaking process without becoming binding requirements. FinCEN can still monitor crypto transactions under existing law and issue new proposals later. For self-custody users and crypto businesses, current reporting rules remain in place nationally.
