On October 5, 2026, FinCEN formally withdrew two proposed crypto surveillance rules targeting unhosted wallets and crypto mixing services. Citing a July 2025 White House report, the agency stated that the Trump administration supports private transactions on public blockchains. While industry groups like Coin Center and the Digital Chamber celebrated the decision as a major victory for financial privacy, FinCEN maintained its concerns regarding illicit finance and noted it may take future steps to monitor mixers.
Regulatory withdrawal timeline
- ▪On October 5, 2026, the Financial Crimes Enforcement Network filed formal withdrawal notices, scheduled for Federal Register publication on October 6, 2026, for two proposed rules requiring financial institutions to report crypto mixer and self-custodied wallet transactions
- ▪The U.S. Treasury's regulatory agenda had previously listed the 2020 unhosted wallet proposal as withdrawn as of April 12, 2024
Withdrawal of the crypto mixing rule
- ▪The Financial Crimes Enforcement Network withdrew its 2023 finding under Section 311 of the USA PATRIOT Act that international crypto mixing is a class of transactions of primary money laundering concern
- ▪The Financial Crimes Enforcement Network stated that the 2023 crypto mixing rule was withdrawn because commenters warned the broad definition could chill legitimate activity and place a large reporting burden on financial institutions
- ▪The Financial Crimes Enforcement Network maintained its concerns that criminals use mixers to hinder investigations, stating it will continue to monitor mixer use and may take future steps to mitigate illicit finance
Impact on unhosted wallet regulations
- ▪The withdrawn December 2020 unhosted wallet proposal would have required banks and money services businesses to keep records on transactions above $3,000 and report transactions exceeding $10,000 to the Financial Crimes Enforcement Network
- ▪The withdrawal of the December 2020 unhosted wallet proposal means there is no new federal requirement forcing banks or exchanges to identify the owner of a self-hosted wallet when a customer transfers funds there
Alignment with Trump administration policy
- ▪The Financial Crimes Enforcement Network stated that its regulatory withdrawals of the crypto mixing and unhosted wallet rules align with the Trump administration's efforts to make digital asset regulations fit-for-purpose
- ▪The Financial Crimes Enforcement Network cited a July 2025 report from the President's Working Group on Digital Asset Markets stating that the Trump administration supports the ability of digital asset users to privately transact on a public blockchain
Debatable claims
- ▪The US government should require reporting on self-custody crypto transactions
- ▪Classifying crypto mixing as a primary money laundering concern is justified
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