FinCEN Withdraws Proposed Crypto Rules

FinCEN withdrew two proposed rules that would have imposed recordkeeping and reporting requirements on financial institutions handling convertible virtual currencies ("CVC") such as bitcoin. The withdrawals took effect October 6, 2026.

One withdrawal covers a December 2020 proposal that would have required banks and money services businesses to (i) keep records and verify customer identities for CVC transactions above $3,000 with unhosted wallets or wallets at certain foreign institutions and (ii) send reports to FinCEN for transactions above $10,000, including by aggregating multiple transactions in 24 hours. FinCEN said it withdrew the proposal to make digital asset regulations "fit-for-purpose," citing a July 2025 report by the President's Working Group on Digital Asset Markets under Executive Order 14178.

The other withdrawal covers an October 2023 proposal under 31 U.S.C. 5318A to find international CVC mixing a class of transactions of primary money laundering concern. Covered institutions would have reported suspected mixing transactions, including customer identity details, wallet addresses, and IP addresses. FinCEN also withdrew the underlying finding in its notice. FinCEN said comments on the broad definition of mixing raised concerns about a chilling effect on legitimate activity and a heavy reporting burden. It said illicit actors still use mixers, and it will keep monitoring them and may act in the future.

Coin Center, a cryptocurrency policy group that opposed both proposals, called the withdrawals a win for financial privacy. It argued the mixing proposal exceeded the limits Congress placed on FinCEN's authority.