FinCEN Scraps Plan to Track Crypto Sent to Personal Wallets

Published October 6, 2026, 07:35 UTC. Based on FinCEN withdrawal notices filed October 5, 2026.

The U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN) on Monday withdrew two crypto proposals that had been pending for years: a December 2020 rule that would have required banks to report transfers to self-custodied crypto wallets above $10,000, and a 2023 proposal targeting crypto mixers. “FinCEN will take no further action” on either, the agency said in two notices filed for public inspection on October 5.

The $10,000 wallet rule

The 2020 proposal would have applied to banks and money services businesses handling convertible virtual currency. When a customer transacted with an “unhosted” wallet, one where the user holds the private keys rather than a company, the institution would have filed a report with FinCEN for amounts over $10,000, or multiple transfers totaling more than $10,000 within 24 hours, according to the original proposal.

Transactions above $3,000 would have triggered record-keeping and identity verification requirements. FinCEN received more than 7,500 comments on the proposal during its original comment period, one of the heaviest responses to any crypto rule.

The mixer designation

The second notice withdraws a 2023 proposal that would have designated convertible virtual currency mixing as a class of transactions of “primary money laundering concern” under Section 311 of the USA PATRIOT Act, a power FinCEN had never before used against a whole category of transactions.

FinCEN said it was persuaded by commenters who warned that the “expansive definition of CVC mixing” could chill legitimate activity and “place a large reporting burden on covered financial institutions.” The agency added that it still believes illicit actors use mixers to frustrate investigations and will keep monitoring mixer activity.

The policy shift

Both withdrawals cite the July 2025 report from the President’s Working Group on Digital Asset Markets, which said lawful users should be able to transact privately on public blockchains. FinCEN described the moves as part of ensuring digital asset rules are “fit-for-purpose.” Deputy Director Jimmy L. Kirby signed both notices.

Coin Center, which campaigned against both proposals, called the withdrawals a victory for financial privacy, arguing the wallet rule “would have created a double standard for cryptocurrency transactions.” For banks and exchanges, it removes a compliance regime that was proposed but never took effect.

The withdrawals do not exempt crypto from existing law: banks and money services businesses must still file suspicious activity reports, screen for sanctions, and meet other Bank Secrecy Act duties.

This article is news reporting and is not investment advice.

Sources

• Federal Register, Withdrawal of the 2020 unhosted wallet NPRM (Doc. 2026-20430) (published Oct. 6, 2026), primary source
• Federal Register, Withdrawal of the 2023 CVC mixing proposal (Doc. 2026-20429) (published Oct. 6, 2026), primary source
• crypto.news, US Treasury drops proposed reporting rules for wallets and crypto mixers (Oct. 5, 2026)
• The Block, Treasury withdraws crypto mixing rule, citing concerns over ‘chilling effect on legitimate activity’ (Oct. 6, 2026)