FinCEN withdrew two crypto proposals on October 6: a 2020 plan that would have required reports on transfers above $10,000 to self-hosted wallets, and a 2023 finding that crypto mixing is a primary money laundering concern. Neither became final. FinCEN said it will take no further action on the wallet plan.
Deputy Director Jimmy L. Kirby signed both Federal Register notices, which were filed on October 5. The Block, in a story dated October 5, reported they were posted to the register's public inspection site that Monday and scheduled for publication the next day. CoinDesk's story is dated October 6.
The wallet proposal dates from December 23, 2020, in the first Trump administration. It would have required banks and money service businesses to report transfers above $10,000, or several adding up to more than that in 24 hours. Those transfers ran between customers and unhosted wallets, the kind a user controls without a custodian, or wallets in jurisdictions FinCEN named. Recordkeeping above $3,000 and identity checks were part of the plan too.
The mixing finding came on October 23, 2023, under section 311 of the USA PATRIOT Act, which lets FinCEN set special measures for a class of transactions of primary money laundering concern. The accompanying proposal would have made institutions report mixing transactions, including wallet addresses, transaction hashes, dates and IP addresses.
$10,000 reports, $3,000 records, 85 FR 83840.
Section 311 finding and reporting proposal, 88 FR 72701.
Designated as a transnational criminal organization.
Bar on sub-agent transfers; comments due Nov 4.
91 FR 63513 (mixing) and 91 FR 63514 (wallets).
Why FinCEN says it withdrew them
For the mixing finding, FinCEN cited commenters' concerns that the definition was expansive enough to have "a chilling effect on legitimate activity" and to place a large reporting burden on institutions. It also cited the July 2025 report of the President's Working Group on Digital Asset Markets, which said lawful users may use mixers for privacy on public blockchains. FinCEN said it will keep monitoring mixer activity for signs of illicit finance and may act later.
The wallet notice gives one reason: the withdrawal is part of the administration's effort to make digital asset rules "fit-for-purpose". It ends with a single line, "FinCEN will take no further action on this NPRM". It does not discuss the comments the proposal drew, which CoinDesk reported ran to thousands.
| Wallet proposal | Mixing proposal | |
|---|---|---|
| Published | December 23, 2020 | October 23, 2023 |
| What it required | Reports above $10,000, records above $3,000, identity checks | Reports with wallet addresses, hashes, dates and IP addresses |
| Withdrawal notice | 91 FR 63514 | 91 FR 63513 |
| FinCEN's stated reason | Making digital asset rules fit-for-purpose | Chilling effect and reporting burden |
Treasury declined to comment on the record, The Block reported. Coin Center, a policy group, called the mixing definition "extraordinarily broad" and said the wallet rule would have created a double standard for crypto transactions.
Both documents were proposals, so no rule in force changes. Criminal cases are separate. On October 5, prosecutors filed a letter in Manhattan federal court opposing Tornado Cash developer Roman Storm's challenge to the trial venue, Decrypt reported. A retrial is set for April 26, 2027.
Looser on privacy tools, tighter on a named network
A day before the withdrawals, FinCEN published a different kind of proposal. It would bar banks and other financial institutions from transmitting funds, in fiat or crypto, to or from sub-agents of the A7 Network, a Russia-linked sanctions evasion service. OFAC sanctioned the network on October 1, and comments are due November 4. The EU's July package targeted the same network, as our July 25 report covered.
The notice says the sub-agents held accounts at about 435 institutions in at least 83 countries as of June 2026. It says more than 180 entities processed A7A5, a ruble-backed stablecoin, in transactions worth at least $179.1 billion between February 2025 and June 2026. Other counts differ: the network claimed $91.5 billion in historical volume as of January 2026, and CoinDesk reported in July that Chainalysis put the network near $120 billion. They measure different things, and no document we read reconciles them.
In our reading, the two actions fit one pattern. The withdrawn rules treated a class of wallets and a class of tools as the risk, which caught ordinary users. The A7 proposal names a network, and FinCEN would apply it only to entities on a confidential list shared with institutions.
What to watch: the November 4 comment deadline on the A7 proposal, whether FinCEN offers any narrower replacement for the withdrawn rules, and the April 2027 Storm retrial. The withdrawal notices propose no replacement.
