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FinCEN withdraws two proposed crypto rules on international mixing and unhosted-wallet transactions, effective October 6

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Two notices published October 6 withdraw FinCEN proposals from 2023 and 2020. One ends a proposed reporting measure for international virtual-currency mixing and withdraws its underlying finding; the other ends proposed requirements for transactions involving unhosted or otherwise covered wallets. They withdraw proposals, rather than repealing finalized requirements, and do not settle the status of other crypto obligations.

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FinCEN has withdrawn two proposed cryptocurrency rules, with both withdrawals published and dated October 6. The Treasury unit's notices end separate proposals about international virtual-currency mixing and transactions involving wallets outside the ordinary financial-institution framework.

Neither notice should be read as blanket permission for any transaction. Each withdraws the particular proposal it identifies.

International mixing

The first notice withdraws the October 23, 2023 proposal at 88 FR 72701, together with its underlying finding that international convertible-virtual-currency mixing is a class of transactions of primary money-laundering concern.

According to the withdrawal, the proposal would have imposed recordkeeping and reporting duties when a covered financial institution knew, suspected or had reason to suspect that a transaction involved mixing within or involving a jurisdiction outside the United States.

FinCEN cites concerns that its expansive definition could discourage legitimate activity and impose a substantial reporting burden. It also says it will continue monitoring mixers for illicit-finance activity and may act in the future. The withdrawal therefore does not announce that the agency has abandoned scrutiny of mixing.

Unhosted-wallet transactions

The second notice withdraws the December 23, 2020 proposal at 85 FR 83840. As described in that notice, it would have required banks and money-services businesses to report and verify certain transactions greater than $10,000, including transactions aggregating to more than that amount in 24 hours.

A separate recordkeeping and customer-verification requirement would have applied above $3,000. These provisions concerned counterparties using unhosted wallets or wallets at specified foreign institutions outside Bank Secrecy Act coverage.

FinCEN states it will take no further action on that proposed rulemaking.

What the dates establish

Both published notices say the withdrawals apply as of October 6, 2026. Their action lines and explanations establish withdrawals, even though the Register categorizes them in its Proposed Rules section. They are not new proposals for the same reporting duties.

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