The US Treasury has officially withdrawn a 2020 regulatory proposal that would have required financial institutions to track and report transactions involving personal, or unhosted, cryptocurrency wallets. Under the abandoned plan, exchanges and banks would have been mandated to verify customer identities for transfers exceeding $3,000 and report any transactions totaling more than $10,000 within a 24-hour window.
FinCEN, the anti-money-laundering bureau under the Treasury, stated that the withdrawal is intended to ensure digital asset regulations remain fit-for-purpose. The decision follows a July 2025 White House report on crypto assets. The administration noted that it supports the right of lawful users to conduct private transactions on public blockchains. The withdrawal becomes effective upon publication in the Federal Register on October 6.
Additionally, the Treasury withdrew a 2023 proposal concerning crypto mixers, which are services that blend coins to obscure transaction origins. FinCEN noted that public feedback warned the proposed definition of mixing could negatively impact legitimate activity. Despite this, the bureau emphasized that illicit actors continue to utilize these tools and that future regulatory actions remain possible.
While these specific proposals were dropped, existing compliance requirements, such as suspicious activity reporting and sanctions screening, remain in effect. Furthermore, legal proceedings regarding mixing services continue, with a retrial for Tornado Cash developer Roman Storm scheduled for April 2027. All Bitcoin transactions remain visible on the public ledger, allowing for ongoing payment tracing.
