The US Treasury Department has officially withdrawn two long-standing regulatory proposals aimed at cryptocurrency surveillance. The Financial Crimes Enforcement Network (FinCEN) filed notices on Monday to scrap the 2020 unhosted wallet rule and the 2023 plan regarding international crypto mixing services.
The unhosted wallet proposal would have mandated that financial institutions report specific crypto transactions exceeding $3,000 and $10,000. Meanwhile, the mixing proposal sought to categorize a broad range of privacy-preserving techniques as primary money laundering concerns, requiring firms to collect IP addresses, wallet data, and user identities.
Advocacy group Coin Center welcomed the decision, noting that the mixing definition was overly broad and risked penalizing legitimate users. The reversal aligns with a July 2025 report from the President’s Working Group on Digital Asset Markets, which emphasized support for private transactions on public blockchains.
Despite these withdrawals, FinCEN stated it will continue to monitor the sector for money laundering and terrorist financing. The agency noted that illicit actors still utilize various tools to hinder investigations and reserved the right to take future regulatory action if necessary.
