The U.S. Treasury Department is abandoning two proposed cryptocurrency surveillance measures, a decision that privacy advocates and the digital-asset industry are viewing as a significant policy victory.
According to Bitcoin Magazine, the Financial Crimes Enforcement Network (FinCEN) filed notices Monday to withdraw its 2020 proposal concerning “unhosted wallets” and a 2023 proposal that would have classified international cryptocurrency mixing as a category of transactions presenting a primary money-laundering concern. The notices are scheduled to appear in the Federal Register on Tuesday.
What the withdrawn rules would have covered
The unhosted-wallet proposal focused on crypto held in wallets controlled directly by users rather than by an exchange or another service provider. It would have required banks and other financial institutions to report certain transactions above $3,000 and $10,000 when customers used such wallets.
The separate mixing proposal had a broad definition of what could qualify as mixing. It included activity that obscured a transaction’s source, destination or amount, potentially covering pooled funds, split transfers, single-use wallets and swaps between different crypto assets.
Under the proposal, financial institutions would have been expected to provide information including wallet addresses, transaction hashes, IP addresses and customer identity details. FinCEN said commenters had warned that the definition could discourage legitimate activity and create a substantial reporting burden for institutions.
Privacy concerns and policy change
Coin Center, a Washington-based crypto policy organization, described the withdrawals as “a significant victory for financial privacy.” The group argued that the mixing definition was so expansive that it could capture ordinary techniques used by cryptocurrency users seeking greater privacy.
It also said uncertainty about where a mixing transaction took place could lead cautious financial institutions to report domestic transactions as well. In Coin Center’s view, that could have consequences for users whose activity was not illicit, including restrictions on or closures of financial accounts.
The decision is also consistent with a July 2025 report from the President’s Working Group on Digital Asset Markets. That report said the Trump administration supported the ability of lawful digital-asset users to transact privately on public blockchains and recommended that Treasury reconsider the wallet rule.
The working group acknowledged that criminals use mixers to launder money, while also noting that legitimate users rely on mixing tools for financial privacy.
FinCEN keeps enforcement options open
The withdrawal does not mean FinCEN considers mixers risk-free. The agency said illicit actors continue to use mixers and other tools to obstruct law-enforcement investigations. It added that it would continue monitoring money laundering and terrorist financing and could take action in the future.
Moneyiar market picture
Moneyiar data at 10:49 a.m. on October 7, 2026, showed Bitcoin at $83,692.61, down 2.88% over 24 hours and 0.21% over seven days. Aethir was $0.006669, down 9.66% in 24 hours but up 10.43% over seven days. Walrus stood at $0.036063, down 2.86% daily and up 5.66% weekly, while RedStone was $0.149381, down 10.07% daily and 11% over seven days.
