US FinCEN Withdraws Proposed Rules on Unhosted Crypto Wallets and Mixers

The U.S. Financial Crimes Enforcement Network has officially withdrawn two proposed regulatory rules that would have imposed strict reporting and compliance burdens on digital asset transactions. The abandoned 2020 proposal would have required institutions to verify customer identities, record unhosted wallet transfers above $3,000, and report transfers topping $10,000. FinCEN also dropped a 2023 proposal targeting crypto mixing services and foreign-linked coin blending following industry concerns about privacy and overbroad definitions. The regulatory withdrawal officially takes effect upon publication in the Federal Register on October 6, providing relief to financial institutions and digital asset intermediaries.