Crypto Rule Withdrawal
Treasury Department Withdraws Proposed Crypto Wallet and Mixer Reporting Rules
Anonymous
Key Points
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The mixer-rule withdrawal also rescinded FinCEN’s 2023 finding that international crypto mixing was “a class of transactions of primary money laundering concern” under Section 311 of the USA PATRIOT Act.
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Under the proposed mixer rule, financial institutions would have had to report details including wallet addresses, transaction hashes and IP addresses, and retain identity records for the customers involved.
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The unhosted-wallet proposal would have counted multiple transactions that collectively exceeded $10,000 within 24 hours toward the reporting threshold, not only a single transaction above that amount.
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Neither proposal singled out particular cryptocurrencies or protocols; both were framed around categories of activity, according to the report.
The Treasury Department's Financial Crimes Enforcement Network has withdrawn two proposed rules that would have forced banks and crypto exchanges to track self-custodied wallets and mixing services. FX Daily Report reports that the wallet rule would have required reports on transactions over $10,000, while the mixer rule would have demanded details like wallet addresses and IP addresses. The Trump administration cited concerns that the rules were too broad and could burden legitimate financial activity.
The withdrawal marks a sharp turn in U.S. crypto regulation. Yahoo Finance notes that FinCEN also rescinded its 2023 finding that international crypto mixing was a major money-laundering threat under the PATRIOT Act. Privacy advocates cheered the move, though regulators say they will still monitor for criminal activity using mixers.
What the Withdrawn Rules Would Have Required
The unhosted-wallet proposal would have forced banks to keep records on crypto transfers over $3,000 and report those exceeding $10,000 to regulators. Moomoo explains that the rule counted multiple transactions within 24 hours that totaled more than $10,000, not just single large transfers. Banks would have also needed to verify customer identities tied to these self-custodied accounts.
The mixer rule went further. Under it, financial institutions would have reported transaction hashes, wallet addresses, IP addresses, and customer identity records for any crypto mixing activity. Coinfomania reports this applied to foreign mixing services. The rules did not target specific cryptocurrencies but rather categories of activity.
Why the Trump Administration Backed Away
FinCEN said the rules didn't fit current digital-asset policy and could chill legitimate financial activity. Coinfomania reports the mixer rule's broad definition raised particular concern about burdening institutions unnecessarily. Officials worried the requirements were too vague and could sweep in legal privacy tools.
The 2023 mixing finding is also gone. This designation had classified international crypto mixing as a primary money-laundering threat under U.S. law. Yahoo Finance notes the withdrawal removes this classification, giving regulators less legal ground to demand reporting on mixing activity going forward.
Privacy Advocates Win, But Uncertainty Remains
Groups like Coin Center celebrated the withdrawal as a win for financial privacy. Coinfomania states the move is seen as a significant shift in regulatory stance. Privacy advocates had warned the rules would expose innocent users to surveillance and make crypto tools less accessible.
Still, regulators remain concerned. FinCEN said it will keep monitoring for criminal use of mixers to obstruct investigations. The broader direction of U.S. crypto rules remains murky—the Trump administration has signaled it wants clearer, lighter-touch rules, but it hasn't yet detailed a full policy.
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