The United States Treasury Department has withdrawn a long-standing proposal that would have required banks and cryptocurrency businesses to collect and report additional information on large digital-asset transfers involving wallets controlled directly by customers.
The Financial Crimes Enforcement Network, known as FinCEN, announced on Sunday that it had scrapped the wallet proposal alongside a separate measure concerning cryptocurrency mixing services. Neither proposal had been implemented.
The wallet rule was first introduced in December 2020, during the final weeks of former President Donald Trump’s first administration.
Had it taken effect, banks and money-service businesses, including cryptocurrency exchanges, would have been required to report transactions exceeding $10,000 involving so-called unhosted wallets. The threshold could also have been reached through multiple transactions conducted within a 24-hour period.
Financial institutions would additionally have been required to obtain information about both the customer and the wallet receiving or sending the funds.
An unhosted wallet refers to a cryptocurrency wallet where the owner personally controls the private keys rather than keeping the digital assets with a bank or cryptocurrency exchange.
The proposal generated thousands of comments from members of the public and industry stakeholders but remained unresolved for almost six years.
FinCEN also withdrew a separate proposal issued in 2023 that sought to designate cryptocurrency mixing transactions as a class of primary money-laundering concern.
Under that proposal, the government would have been able to introduce additional reporting obligations for financial institutions involved in transactions connected to crypto mixers.
Crypto mixers are services designed to obscure the movement and ownership of digital assets by combining transactions from multiple users before sending the funds to different wallets.
FinCEN said the decision to withdraw both proposals formed part of the Trump administration’s broader push to reduce regulation and establish digital-asset rules that are “fit-for-purpose.”
