Neither proposal was ever finalized, so the withdrawals leave current obligations for banks and money services businesses unchanged. FinCEN said it still believes illicit actors use mixers and may return to the subject.
The Treasury Department's Financial Crimes Enforcement Network has withdrawn two long-pending crypto rulemakings, ending a proposal that would have treated international crypto mixing as a class of transactions of primary money laundering concern and a separate 2020 proposal that would have required banks and money services businesses to identify customers who transact with self-hosted wallets.
Both notices were published in the Federal Register on Tuesday and withdraw the earlier proposals as of October 6, 2026. The mixing notice ends the finding and proposed rule FinCEN published in October 2023 at 88 FR 72701. The second notice ends the unhosted wallet proposal published in December 2020 at 85 FR 83840. Both carry RIN 1506-AB47 and are signed by FinCEN Deputy Director Jimmy L. Kirby. Neither rulemaking was ever finalized, so neither withdrawal changes what covered financial institutions must verify, record or report today.
The 2023 proposal rested on section 311 of the USA PATRIOT Act, codified at 31 U.S.C. 5318A, which lets Treasury find that a foreign jurisdiction, a foreign financial institution, a class of transactions or a type of account is of primary money laundering concern and then impose one of five special measures. FinCEN proposed the first of them, enhanced recordkeeping and reporting. Covered institutions would have had to file a report whenever they knew, suspected or had reason to suspect that a transaction involved mixing, listing the amount transferred, the type of currency, the mixer used, customer wallet addresses, transaction hashes, dates, IP addresses and a narrative description of the activity. The records they kept on the customer behind such a transaction would have included full identity, date of birth, address, email address and unique identifying numbers.
The definition of the activity was the part commenters objected to. FinCEN had defined mixing as facilitating transactions in a way that obscures their source, destination or amount, whatever protocol or service was used, and listed six qualifying techniques: pooling funds from multiple persons, wallets or accounts; using programmatic or algorithmic code to manage a transaction's structure; splitting a transfer across a series of independent transactions; creating and using single-use wallets; exchanging between types of digital asset; and allowing user-initiated delays. A mixer, in turn, was "any person, group, service, code, tool, or function" that facilitates mixing. The withdrawal says the agency's decision was informed by concerns that the expansive definition "could have a chilling effect on legitimate activity and place a large reporting burden on covered financial institutions."
Both notices cite the July 2025 report of the President's Working Group on Digital Asset Markets, established by Executive Order 14178. The report said the administration "supports the ability of lawful users of digital assets to privately transact on a public blockchain," and, while acknowledging that illicit actors use mixers to hide the origin of funds, said that "lawful users of digital assets may leverage mixers to enable financial privacy when transacting through public blockchains." It recommended that Treasury consider next steps on the mixing rulemaking. FinCEN described the wallet withdrawal as part of the administration's effort to make digital asset regulations "fit-for-purpose" and said it will take no further action on that proposal.
The wallet rule had been issued weeks before the end of the first Trump administration. It would have covered transfers where the counterparty used an unhosted wallet, or a wallet held at an institution outside the Bank Secrecy Act regime in a foreign jurisdiction FinCEN identified. Banks and money services businesses would have had to keep records and verify their own customer's identity on such transactions above $3,000, and report to FinCEN on transactions above $10,000, or on several transactions aggregating above $10,000 within 24 hours.
Dropping the mixing finding does not retire the mechanism behind it. A day earlier, on October 5, FinCEN proposed a finding and rule covering any company operating outside the United States that is controlled by the A7 Network, which the agency describes as an OFAC-sanctioned sanctions evasion and money laundering service with ties to Russia. That proposal uses section 9714 of the Combating Russian Money Laundering Act, which lets Treasury impose any of the five section 311 special measures and adds a sixth, a prohibition on certain transmittals of funds. FinCEN proposes applying that prohibition to covered financial institutions handling transactions involving an A7 sub-agent. Comments on it close November 4.
Other digital asset rulemakings are still moving. The SEC's crypto custody rule, which makes self-custody a last resort, is now public, and the CFTC's crypto rules reached the White House in September.
FinCEN said it will continue to monitor activity involving mixers for signs of money laundering, terrorist financing or other illicit finance, and "may take appropriate steps in the future to mitigate any such activity." What the two notices end is the rulemakings, not the authority they were built on. A later attempt at either subject would have to start again with a new proposal and a new comment period.
