Analysis
FinCEN, the Treasury bureau responsible for combating financial crime, announced on October 5 that it is withdrawing two proposals that would have added reporting and recordkeeping duties for financial institutions handling digital assets. The agency said it considered public comments and described the decision as part of the administration’s deregulatory agenda. The first proposal, announced December 18, 2020, concerned transactions involving wallets not hosted by a financial institution, often called self-custody or unhosted wallets, as well as wallets hosted in certain foreign jurisdictions. It would have required banks and money-services businesses to report covered transactions above $10,000 and keep records and verify customer identity for covered transactions above $3,000. The second, announced October 19, 2023, concerned international crypto mixing, which obscures the movement or origin of funds. It would have required covered financial institutions to report transactions they knew, suspected or had reason to suspect involved mixing within or involving jurisdictions outside the United States. FinCEN originally presented that proposal as a way to combat money laundering and terrorist financing. Both withdrawal notices were filed for public inspection on October 5 at 8:45 a.m. Eastern and are scheduled for publication October 6. The agency is abandoning proposed additional requirements; this announcement is not a repeal of existing anti-money-laundering obligations.
What remains uncertain
The notices remained unpublished public-inspection documents when checked on October 5. The announcement does not establish a change to unrelated reporting requirements or sanctions, and it does not quantify the compliance costs avoided.
Sources
- FinCEN: withdrawal announcement, October 5, 2026 ↗Official release
- Federal Register public inspection: wallet proposal withdrawal, document 2026-20430 ↗Official source
- Federal Register public inspection: mixing proposal withdrawal, document 2026-20429 ↗Official source
- Treasury: original wallet proposal, December 18, 2020 ↗Official release
- FinCEN: original mixing proposal, October 19, 2023 ↗Official release