FinCEN Withdraws Proposed Rules on Self-Hosted Wallets and Crypto Mixing
FinCEN has withdrawn two long-pending proposals targeting self-hosted wallets and cryptocurrency mixing, ending rules that would have expanded recordkeeping and reporting requirements for financial institutions.
As of October 6, 2026, the United States Financial Crimes Enforcement Network (FinCEN) withdrew two notices of proposed rulemaking (NPRMs) aimed at cryptocurrency regulation that had never taken effect.
The first proposal, published in December 2020, targeted certain cryptocurrency transactions involving self-hosted wallets, or wallets in certain foreign jurisdictions. For transactions above $3,000, banks and money services businesses would have been required to maintain specified records and verify their customer's identity. Transactions above $10,000, including aggregated transactions exceeding that amount within 24 hours, would also have triggered reporting to FinCEN.
The second proposal from October 2023 found international cryptocurrency mixing to be a “class of transactions of primary money laundering concern” under Section 311 of the USA PATRIOT Act. Based on that finding, FinCEN proposed enhanced recordkeeping and reporting requirements for financial institutions handling transactions involving international crypto mixing. FinCEN has now withdrawn both the finding and the proposed reporting requirements.
FinCEN maintained that illicit actors continue to use crypto mixers to obscure transactions and hinder law enforcement investigations. However, the agency said it received comments about the definition of crypto mixing being too broad, which could affect legitimate activity, and also that the proposal could result in substantial reporting requirements for financial institutions.
The decision also reflects a broader shift in U.S. digital-asset policy under the Trump administration. Both withdrawal notices cite the July 2025 report of the President's Working Group on Digital Asset Markets, established under Executive Order 14178.
According to a FinCEN news release:
“FinCEN has considered the comments submitted in response to these proposals and is withdrawing them as part of the Trump Administration’s deregulatory agenda and ongoing efforts to ensure digital asset regulations are fit-for-purpose.”
Both measures remained proposed rules and were never finalized as regulations. With FinCEN's October 6 withdrawals, both rulemaking efforts have ended and the proposed requirements will not take effect. FinCEN said it will take no further action on the wallet proposal, while continuing to monitor mixer activity and potentially taking further steps in the future.
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