UPDATE: FinCEN drops 2020 self-custody wallet rule alongside crypto mixer proposal
CIE News ·
FinCEN formally withdrew its 2020 unhosted wallet proposal alongside its 2023 crypto mixer rule on October 5, 2026, citing privacy concerns and excessive compliance burdens.
FinCEN formally dropped two separate rulemakings on October 5, 2026, expanding on its decision to withdraw a contentious crypto mixing proposal. As previously reported, the agency abandoned its plan to designate convertible virtual currency mixing as a primary money laundering concern, but it simultaneously withdrew a December 2020 proposal targeted at self-custody wallets.
The 2020 rulemaking would have forced banks and money services businesses to verify identities and log counterparty records for unhosted wallet transfers above $3,000. It also sought to require formal reporting to FinCEN for transactions exceeding $10,000. Regulators stated that both the wallet framework and the 2023 mixer measure were abandoned due to excessive compliance burdens and potential chilling effects on legitimate privacy tools.
FinCEN affirmed that it will take no further action on the proposals. Regulated financial entities remain subject to standard Bank Secrecy Act obligations, and the agency noted it will continue tracking mixing activity for illicit finance.