The U.S. Treasury Department cancels proposed reporting rules on wallets and cryptocurrency mixers

The U.S. Treasury Department withdraws two proposed crypto asset rules

The U.S. Treasury Department has decided to withdraw two proposed rules on crypto assets proposed in 2020 and 2023 that originally planned to expand financial institutions 'reporting and record-keeping obligations in self-custodial wallets and mixed-currency transactions.

The Financial Crimes Enforcement Agency (FinCEN) filed two withdrawal notices on October 5, and the official announcement is scheduled for October 6. Among them, the rules on wallets set a separate $3,000 record-keeping threshold and a $10,000 reporting threshold. The agency cited concerns about legal activities and compliance costs when withdrawing its proposal on mixing-related currencies. Coin Center welcomed the decision, calling it a victory for financial privacy.

FinCEN, the Treasury agency responsible for enforcing the Bank Secrecy Act, said it would no longer advance its proposed wallet rules, while a separate notice withdrew the hybrid proposal and its underlying anti-money laundering designation. Both documents were submitted by Deputy Director Jimmy L. Signed by Kirby and made available for public inspection on October 5.

In explaining the decision to withdraw the wallet rule, the agency cited the Trump administration's efforts to ensure digital asset regulation was "for purpose." Both notices refer to the report released by the President's Digital Asset Markets Working Group in July 2025.

The Treasury Department cancels wallet reporting and identity verification requirements

Based on wallet-related withdrawal notices, a proposed plan proposed in December 2020 would require banks and money services companies to collect information involving certain crypto transfers made by wallets held other than regulated financial institutions.

Under the proposed framework, when regulated transfers exceed US$3,000, institutions will need to maintain transaction and counterparty records and verify customer identities. For transactions exceeding US$10,000, institutions also need to submit reports to FinCEN. The notice stated that the reporting threshold also covers multiple transactions that cumulatively exceed US$10,000 in a 24-hour period. FinCEN's notice lists activities such as deposits, withdrawals, exchanges, payments and other transfers covered by the proposal.

In addition to self-custodial wallets, the bureau said the draft also covers wallets held by foreign financial institutions outside the framework of the Bank Secrecy Act and within FinCEN designated jurisdictions.

When the Ministry of Finance proposed the proposal in December 2020, it described it as a response to loopholes in anti-money laundering control in certain digital asset transactions. The department sought additional records to help authorities identify people involved in illegal transfers.

For U.S. users, Coin Center's objections focus on personal privacy information that its banks or crypto service providers will collect. The organization believes the proposal could require institutions to retain details of counterparties that are not their customers.

FinCEN withdraws its designation of foreign cryptocurrency hybrids

In a separate notice, FinCEN withdrew its designation in October 2023 that international convertible virtual currency hybrids constituted one of the transaction categories of major anti-money laundering concerns, and simultaneously removed the proposed reporting measures associated with the designation.

The agency previously used Section 311 of the USA Patriot Act to authorize the Treasury Department to implement special measures for specific foreign money laundering risks. In this case, FinCEN proposed to increase reporting and recording requirements for transactions involving mixed currencies outside the United States.

According to the agency's initial announcement, in the proposed plan for 2023, when the regulated institution knows, suspects or has reason to suspect that a foreign hybrid is involved, it will need to report relevant transactions. The definition of a revocation notice description goes beyond the scope of a specifically named mixed-currency service. FinCEN's draft includes activities such as pooling funds, splitting transfers, using one-time wallets, exchanging digital assets, and delaying transactions, provided that these activities conceal the source, destination, or amount of the transfer.

FinCEN acknowledges commentators 'concerns that the definition may inhibit legal activity and impose huge reporting costs. The notice also cited the White House task force's endorsement that legitimate users may use currency mixers to protect privacy on public blockchains.

Despite this, the agency maintains that criminals use mixed-currency tools to hinder investigations. FinCEN said it will continue to monitor money laundering, terrorist financing and other illegal financial activities and take further action when appropriate.

Coin Center's objections also cover domestic transactions

Coin Center called the withdrawal a "major victory for financial privacy" in an October 5 post by Jason Somensatto, after the group had opposed both proposals through public comments and advocacy.

As crypto.news reported in January 2024, the group has challenged the hybrid proposal, questioning its scope, how domestic transactions are handled, and the potential impact on legitimate users. The Coin Center believes that due to the difficulty of determining the location of transactions, prudent agencies may report activities that are conducted entirely within the United States.

In that early challenge, the group questioned whether the proposal exceeded Section 311 's restrictions on types of transactions involving foreign jurisdictions. It also raised concerns about due process that legal activities were identified as money laundering without individual notices or hearings.

In May 2024, another controversy over unmanaged software rose to the level of Congress, when Senators Cynthia Lummis and Ron Wyden questioned the money transporters 'interpretations in a letter to then-Attorney General Merrick Garland. According to the senator's letter, a service requires control of customer assets to be considered a money transmitter under the terms it cites. Wyden also warned that holding software developers accountable for users alleged criminal behavior could raise First Amendment issues.

FinCEN's recent fraud analysis uses existing financial reports

In a report released on September 4, FinCEN identified approximately $12.7 billion in suspected fraud through 33,904 Bank Secrecy Act reports filed between September 2023 and December 2025.

该局表示，约有1,300家金融机构提交了这些报告。货币服务企业（主要是数字资产公司）提交了55%的报告，并识别出55亿美元的可疑活动，而银行则报告了另外64亿美元。

FinCEN警告称，汇总数据并非受害者损失的直接衡量标准，因为报告可能包括未成功的转账、重复报告以及申报错误。其分析显示受害者遍布全美50个州及多个美国领土。

据该机构称，受害者有时通过退休储蓄、房屋净值、抵押贷款和个人贷款资助欺诈性投资。FinCEN表示，自2015年以来，其快速响应项目已为5,790名美国受害者追回略超10亿美元的资金。