FinCEN withdraws proposed rules on crypto mixing and unhosted wallets
CIE News ·
FinCEN formally withdrew proposed regulations targeting crypto-mixing services and unhosted wallets, published in the Federal Register, while keeping current AML requirements in force.
The Financial Crimes Enforcement Network (FinCEN) formally withdrew two proposed rulemakings targeting convertible virtual currencies, published in the Federal Register at 91 FR 63513. The agency retracted its 2020 proposal covering recordkeeping and reporting obligations for unhosted wallets, alongside an October 2023 proposal under Section 311 of the USA PATRIOT Act that labeled international crypto-mixing as a primary money laundering concern.
According to technologylaw.ai, the withdrawal took effect on October 6, 2026, following concerns regarding high compliance costs, broad regulatory scope, and financial privacy. FinCEN stated that the move aligns with a deregulatory agenda and ensures regulations are fit-for-purpose.
The action eliminates planned reporting obligations for regulated institutions that interact with crypto-mixing protocols. Existing anti-money laundering frameworks and suspicious activity reporting obligations remain fully enforceable across the digital asset sector.