The Financial Crimes Enforcement Network, the Treasury Department bureau that polices money laundering, withdrew two proposed crypto rules on October 5. One would have set recordkeeping and reporting requirements for transactions involving private crypto wallets, and the other would have labeled crypto mixing a primary money laundering concern. FinCEN’s announcement says it is withdrawing them as part of the Trump Administration’s deregulatory agenda and ongoing efforts to ensure digital asset regulations are fit-for-purpose.
Both were proposals, not final rules, so the withdrawals do not repeal anything that was in force.
The private-wallet proposal
The first withdrawn proposal, from 2020, dealt with what regulators call unhosted wallets, meaning crypto wallets that a person controls directly rather than through an exchange or other company. FinCEN’s notice entry, titled Requirements for Certain Transactions Involving Convertible Virtual Currency or Digital Assets, lists the proposal as a recordkeeping and reporting rule that applies to banks and money services businesses.
Money services businesses include companies that move or exchange money for customers. Under the proposal, banks and those businesses would have faced new duties when customers sent crypto to or from a wallet they control themselves. With the proposal withdrawn, those duties will not take effect.
The coin-mixing proposal
The second withdrawn proposal came in 2023. FinCEN’s notice on convertible virtual currency mixing describes it as a special measure that would have treated crypto mixing as a class of transactions of primary money laundering concern.
A primary money laundering concern finding is a tool FinCEN can use to require U.S. financial institutions to take extra steps, or to restrict certain dealings. The proposal asked for that finding for mixing as a category. Now it is gone.
Anyone who holds crypto in a self-managed wallet, or who uses a bank or exchange to move it, may wonder what the change means for household finances. The withdrawals add no new requirement and remove none that was in force.
With FinCEN’s private-wallet and coin-mixing proposals dropped, The Retirement Money Brief tracks the comment and rule dates that could bring crypto oversight back, one email each weekday.
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What the withdrawals leave in place
The two proposals worked in different ways. The wallet proposal would have put recordkeeping and reporting duties on banks and money services businesses. The mixing proposal would have used a special measure aimed at a class of transactions, which is the language in FinCEN’s notice. Withdrawing both closes two separate routes the agency had open for tightening oversight of digital assets.
The withdrawn proposals were aimed at banks and money services businesses, not at individual wallet owners directly. A person who owns crypto still has the same tax reporting obligations as before, because those come from the Internal Revenue Service and not from FinCEN’s withdrawn proposals. Banks and exchanges also keep the anti-money-laundering programs they already run.
What the withdrawals change is the regulatory path ahead. A bank or crypto firm that had been preparing for the wallet reporting requirement can stop. Customers who sent crypto to their own wallets would have been the people most likely to notice the extra questions the proposal could have produced.
FinCEN’s stated aim is digital asset regulation that is fit-for-purpose.
Risks that do not depend on the rule
Crypto transfers are generally irreversible, and a coin sent to the wrong address or to a scammer typically cannot be recalled. That was true before the proposals and is true after their withdrawal. Households that hold digital assets, including retirees who have been pitched them, still carry that risk directly, with no deposit insurance behind a self-held wallet.
A regulatory rollback shifts more of the checking onto the holder. Someone sending crypto should confirm the recipient address character by character, send a small test amount first where that is possible, and be wary of anyone who pressures them to move funds quickly.
Keeping crypto holdings in order after the rule withdrawals
The free route is the agency’s own page. FinCEN posts its news releases and its Federal Register notices on fincen.gov at no charge, including the October 5 withdrawal and the two notice entries for the wallet and mixing proposals. Reading them first-hand is the way to see exactly what was withdrawn and what was not.
For holders, the task at hand is record-keeping. Gather the dates and amounts of every purchase, sale and transfer, note which exchange or wallet each sits in, and keep the transaction histories those platforms provide. Those records are what a tax preparer asks for, and they matter regardless of what FinCEN proposes or withdraws.
The sourced facts are narrow and clear: FinCEN withdrew two proposals on October 5, the 2020 unhosted-wallet recordkeeping and reporting proposal for banks and money services businesses and the 2023 mixing proposal, and it cited the Trump Administration’s deregulatory agenda.
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This article was produced with AI assistance and reviewed by The Financial Wire’s editorial team.
Warren Cohen is a finance writer based in Phoenix, Arizona, covering personal finance topics including credit, banking, and beginner investing. He earned his degree in business administration from Arizona State University and began his career working in consumer finance, where he gained direct experience with lending and credit systems. He now writes for personal finance websites and fintech platforms, focusing on clear, practical content that helps readers make informed financial decisions.
