The Financial Crimes Enforcement Network (FinCEN) has officially withdrawn two regulatory proposals concerning cryptocurrency. The first initiative, introduced in December 2020, targeted transactions involving non-custodial wallets. It required financial institutions to collect data on counterparties for transfers exceeding $3,000 and report transactions over $10,000.
The second withdrawn proposal, dating back to October 2023, aimed to classify international crypto mixer operations as a primary money laundering concern under the USA PATRIOT Act. FinCEN cited concerns from industry participants regarding the broad definition of mixing, which could have imposed excessive reporting burdens on legitimate financial activities.
This shift in policy aligns with a broader change in the US government's stance on privacy tools. In March 2025, the Treasury Department acknowledged that mixers can serve legitimate purposes, such as protecting personal financial privacy. Additionally, the Treasury lifted sanctions on Tornado Cash following a court ruling.
Recent legal and legislative developments further reflect this trend. The Department of Justice has stated it will stop pursuing DeFi developers under unlicensed money transmission laws. Furthermore, in January 2026, Senators Cynthia Lummis and Ron Wyden introduced a bill to exempt non-custodial service providers and software developers from money transmitter licensing requirements.
