US Treasury withdraws personal crypto wallet and mixing reporting plans

The US Treasury has withdrawn a 2020 proposal to track transfers involving personal crypto wallets. The Financial Crimes Enforcement Network (FinCEN), Treasury's anti-money-laundering bureau, said it will take no further action on the proposal. FinCEN withdrew a second proposal targeting crypto mixing on the same day. The withdrawal takes effect upon publication in the Federal Register on October 6.

Personal, or "unhosted," wallets are apps or devices where users hold their own coins instead of leaving the coins with a bank or exchange. The 2020 proposal would have required banks and exchanges to verify their customers and keep records for transfers involving such wallets above $3,000. Transfers above $10,000, or several transfers totaling $10,000 within 24 hours, would have triggered a report to FinCEN. The proposed rule never took effect. FinCEN's filing says the withdrawal aims to keep digital asset rules "fit-for-purpose," citing a July 2025 White House crypto report. An excerpt in FinCEN's report says the Trump administration supports lawful digital asset users' ability to transact privately on a public blockchain.

FinCEN also withdrew a 2023 proposal concerning crypto mixing, which blends many users' coins to conceal where funds originated. The proposal would have required firms to report suspected mixing with a foreign link. Treasury's regulatory agenda had still listed the proposed rule for final action in December 2027. FinCEN said commenters warned that the proposed definition of mixing could discourage legitimate activity. However, FinCEN said illicit actors still use mixers and that the bureau may act in the future.

Prosecutors are also pursuing crypto mixing cases in court. Developer Roman Storm faces a Tornado Cash retrial in April 2027 over the Ethereum-based mixing service. Existing duties, including suspicious activity reports and sanctions screening, remain in force. Every Bitcoin transfer still appears on a public ledger, where wallet payments can be traced.