US federal: FinCEN's "unhosted wallet" rule (the so-called wallet-registration rule)
Document text
Research, not advice. Part of the Bitcoin research archive (October 2026). Claims labelled unverified, contested or fringe are reported, not endorsed; statuses of bills and rules are as of the date checked. Government, court and patent records are public domain; the research notes are CC BY 4.0.
US federal: FinCEN's "unhosted wallet" rule (the so-called wallet-registration rule)
| Field | Value |
|---|---|
| Jurisdiction | United States, federal |
| Agency | Financial Crimes Enforcement Network (FinCEN), a bureau of the Treasury Department |
| Item | Proposed rule "Requirements for Certain Transactions Involving Convertible Virtual Currency or Digital Assets" |
| Identifiers | FR Doc 2020-28437; 85 FR 83840 (2020-12-23); RIN 1506-AB47; docket FINCEN-2020-0020 |
| Who it would have bound | Banks and money services businesses (MSBs), which include crypto exchanges. It placed no duty on individuals. |
| Status | Withdrawn. FinCEN announced it on 2026-10-05; the withdrawal notice is FR Doc 2026-20430, 91 FR 63514 (2026-10-06). It never became a final rule. |
| Companion item | The 2023 crypto-mixer proposal (88 FR 72701) was withdrawn the same day (FR Doc 2026-20429, 91 FR 63513) |
| Date checked | 2026-10-09 |
| Saved sources | sources/fincen-wallet-rule/ (see its INDEX.md) |
The claim, and what the record shows
The claim as first heard: FinCEN "tried to make a rule the other day" requiring people to register their Bitcoin wallets, and the attempt was blocked. The record differs on all three points.
- It did not require anyone to register a wallet. The proposal put reporting, recordkeeping and identity-verification duties on banks and MSBs. They would have been covered when a customer sent crypto to, or received it from, a wallet that no financial institution controls (an "unhosted" or self-custody wallet) (85 FR 83840, Summary and §I.B). The part closest to "registration" is this: the exchange would have had to collect the name and physical address of the person on the other side, the self-custody counterparty, and send it to FinCEN above $10,000 or keep it above $3,000 (same source, §I.B; Treasury press release sm1216, 2020-12-18). That is collecting identity per transaction, not a wallet registry. I found no FinCEN proposal asking individuals to register wallets. I checked, through the Federal Register API on 2026-10-09: - the titles of all 21 FinCEN documents that mention "convertible virtual currency" (2020 to 2026); - searches for "unhosted", "self-hosted wallet" and "self-custody" from 2025-01-01 on.
- It was not new. It was proposed in December 2020, in the last weeks of the first Trump administration. What happened "the other day" was its withdrawal: FinCEN's press release came on Monday 2026-10-05, and the Federal Register notice was published on Tuesday 2026-10-06 (FinCEN press release, 2026-10-05; 91 FR 63514).
- It was not blocked by a court or by Congress. FinCEN withdrew it itself. The notice gives the reason: the July 2025 report of the President's Working Group on Digital Asset Markets, and "the Trump Administration's ongoing efforts to ensure digital asset regulations are fit-for-purpose" (91 FR 63514–15). FinCEN's press release adds "as part of the Trump Administration's deregulatory agenda". I found: - no court challenge. CourtListener opinion searches for "unhosted wallet", "85 Fed. Reg. 83840" and "FINCEN-2020-0020" returned nothing; docket (RECAP) searches returned only unrelated forfeiture and criminal cases, 2026-10-09. - no Congressional Review Act resolution. That law reaches rules an agency has finalized and sent to Congress; this one was never finalized. (That reasoning is mine, not taken from a source.) - no appropriations rider. The House FSGG bills H.R. 4664 and H.R. 8773 (118th Congress), as reported, do not mention wallets. I did not check the FY2026 or FY2027 bills.
The proposal had been stalled since its comment period closed in March 2021, as section 3 below shows.
What else might be feeding the "blocked" idea (section 7): Congress really did kill a different crypto reporting rule, the IRS "DeFi broker" rule, in April 2025. And on 2026-09-15 the Senate blocked the CLARITY Act, which contains self-custody protections.
1. What the 2020 proposal would have required
Document: NPRM, "Requirements for Certain Transactions Involving Convertible Virtual Currency or Digital Assets". FR Doc 2020-28437, 85 FR 83840–83862, published 2020-12-23, filed 2020-12-18. RIN 1506-AB47, docket FINCEN-2020-0020. Signed by Kenneth A. Blanco, FinCEN Director. Amends 31 CFR Parts 1010, 1020 and 1022 (NPRM text).
Covered transactions: deposits, withdrawals, exchanges and other transfers of convertible virtual currency (CVC, which includes bitcoin) or "legal tender digital assets" (LTDA) by, through or to a bank or MSB. A transaction was covered when the counterparty used either: - an unhosted wallet, defined as one where "a financial institution is not required to conduct transactions from the wallet", for example when the owner holds the private key; or - an "otherwise covered" wallet: one held at a foreign institution not subject to the Bank Secrecy Act (BSA), in a jurisdiction on a new FinCEN "Foreign Jurisdictions List". The list would start with Burma, Iran and North Korea.
Source: 85 FR 83840, §I.B and §II.A.
| Requirement | Threshold | What the bank or MSB must do | Source |
|---|---|---|---|
| Reporting (new 31 CFR 1010.316) | More than $10,000, or several CVC/LTDA transactions with such wallets that aggregate to more than $10,000 in 24 hours | File a report with FinCEN within 15 days, including the counterparty's name and physical address, and verify its own customer's identity | NPRM §I.B, §III.B; press release sm1216 |
| Recordkeeping (new 31 CFR 1010.410(g)) | More than $3,000 | Keep records of the transaction and the counterparty, including name and physical address, and verify the customer's identity | NPRM §I.B, §IV; press release sm1216 |
| Exemptions | — | Transfers between BSA-regulated hosted wallets are exempt, as are transfers to most foreign-hosted wallets, except those in listed jurisdictions | NPRM §III.B |
| Legal hook | — | CVC and LTDA to be declared "monetary instruments" under the BSA. The existing cash CTR rule and cross-border currency reporting would not change. | NPRM Summary |
The press release lists the data to be collected: customer name and address; CVC type, amount, time and dollar value; payment instructions; and each counterparty's name and physical address (sm1216). FinCEN also asked whether to extend the rule to broker-dealers (NPRM n.20).
Stated purpose: to close a gap that "malign actors" exploit, citing terrorist financing, sanctions evasion, ransomware and darknet markets (NPRM §I). Treasury Secretary Steven Mnuchin said the rule "applies to financial institutions and is consistent with existing requirements" (sm1216).
2. Comment period and comments
| Date | Event | Source |
|---|---|---|
| 2020-12-18 | NPRM filed with the Federal Register; Treasury press release | sm1216; NPRM header |
| 2020-12-23 | Published. Only a 15-day comment period, justified by "national security imperatives". The printed deadline was 2021-01-04. | NPRM DATES and §I |
| 2021-01-07 | FinCEN later said the original period "formally closed" on this date. It does not match the 01-04 date printed in the NPRM. | 86 FR 3897; 86 FR 7352 |
| 2021-01-15 | Reopened (86 FR 3897, FR Doc 2021-01016). Comments on reporting due 2021-02-01; on counterparty reporting and recordkeeping due 2021-03-01. FinCEN added authority from the Anti-Money Laundering Act of 2020 (31 U.S.C. 5312(a)(3)(D), "value that substitutes for" currency). | reopening notice |
| 2021-01-28 | Extended (86 FR 7352, FR Doc 2021-01918, filed 2021-01-26). One deadline for everything: 2021-03-29. | extension notice |
Context: the extension was filed six days after the change of administration on 2021-01-20. The notice itself says only that it gives more time to respond, and links the extension to nothing else.
Volume: the docket shows 8,274 comments (regulations.gov API count, 2026-10-09).
Notable comments (all opposed or asked for major changes). Copies are in
sources/fincen-wallet-rule/comments-2020-docket/; the summaries are mine.
| Commenter | Date | Position |
|---|---|---|
| Coinbase (FINCEN-2020-0020-6205) | 2021-01-04 | Called it "bad regulation done poorly" and asked Treasury to withdraw it. Objected to the 15-day period across holidays, the new counterparty-identification duty and the privacy intrusion. |
| Coinbase, second comment (-8248) | 2021-03-25 | Treasury should first finish the review of existing reporting that the AML Act requires. A records-only rule above $10,000, with no counterparty collection, would make more sense. |
| Square, Inc., signed by Jack Dorsey (-6058) | PDF created 2021-01-04 | The rule would force Square to collect "unreliable data" on non-customers. It would push users toward self-custody and offshore services, so FinCEN would see less, not more. |
| Square, second comment (-8265) | 2021-03-29 | Repeats that recordkeeping is unworkable and asks for a risk-based, tailored rule. |
| Electronic Frontier Foundation (-6805) | 2021-01-04 | Civil-liberties objections, including under the Fourth Amendment: the rule gives government access to sensitive financial data about non-customers. |
| Coin Center (-7277, -7464; its first letter, dated 2020-12-22, is cited in -2417) | 2021-01-07 and 2021-03-15 | Procedural objections: the deadline was miscounted, so the public got about 12 days, not 15. Also argued Treasury lacked authority. Its later letter says the 60-day extension and the new law eased the procedural and statutory problems, but that collecting counterparty identity is "infeasible and unacceptable for privacy reasons". |
| Blockchain Association (-6578, -8274) | 2021-01-04 and 2021-03-29 | Submitted "truncated" comments because of the short period, then fuller ones. |
| Wall Street Blockchain Alliance (-2417) | 2021-01-04 | Supports AML enforcement in general, but asked for at least a 60-day comment period, citing ACUS Recommendation 2011-2. |
Support: the support on record comes from Treasury itself: Mnuchin's statement (sm1216) and the NPRM's national-security rationale. I did not find any supporting public comment. That is not proof there were none: I read the letters above but could not run a keyword search across all 8,274 comments, because the regulations.gov API rate-limited me (see "Could not confirm").
3. Stalled from 2021 to 2025: what the Unified Agenda shows
The Unified Agenda is OMB's twice-yearly list of each agency's planned rules. Its entries for RIN 1506-AB47:
| Agenda | Stage / timetable | Source |
|---|---|---|
| Spring 2021 | Final action planned 11/2021 | reginfo.gov, pubId 202104 |
| Fall 2021 | Final action 09/2022 | pubId 202110 |
| Spring 2022 | Final action 03/2023 | pubId 202204 |
| Fall 2022 | Final action 02/2024 | pubId 202210 |
| Spring 2023 | Final action 06/2024 | pubId 202304 |
| Fall 2023 | Final action "To Be Determined" | saved |
| Spring 2024 | "Completed Actions", timetable "Withdrawn 04/12/2024" | saved |
| Fall 2024, Spring 2025, 2026 agenda | No longer listed | reginfo.gov, pubIds 202410, 202504, 202510 |
So the Biden-era FinCEN had already marked the rule "withdrawn" in the Spring 2024 agenda. It did not publish a Federal Register withdrawal at that time: the Federal Register API lists five documents under RIN 1506-AB47, and none falls between 2021-01-28 and 2026-10-06. The formal, published withdrawal came only in October 2026.
July 2025. The President's Working Group report (Strengthening American Leadership in Digital Financial Technology, under Executive Order 14178) said FinCEN "is withdrawing" two digital-asset proposals. One is the "unhosted wallet rule" (85 FR 83840). The other is the October 2020 travel-rule threshold proposal (85 FR 68005) (PWG report, printed p. 100).
4. The withdrawal (October 2026)
- Press release: "FinCEN Announces Withdrawals of Proposed Digital Asset Related Rules", 2026-10-05. FinCEN says it "has considered the comments submitted" and is withdrawing both proposals "as part of the Trump Administration's deregulatory agenda and ongoing efforts to ensure digital asset regulations are fit-for-purpose" (saved).
- Federal Register notice: "Requirements for Certain Transactions Involving Convertible Virtual Currency or Digital Assets; Withdrawal". FR Doc 2026-20430, 91 FR 63514–63515, published 2026-10-06 (filed 2026-10-05). Effective "as of October 6, 2026". Signed by Jimmy L. Kirby, Deputy Director. Key line: "FinCEN will not take any further action on this NPRM." The stated reason cites the PWG report (p. 100) and EO 14178 (90 FR 8647) (saved).
- Mechanism: an agency withdrawal of its own proposal. There was no court order or act of Congress, and no executive order aimed at this rule.
- EO 14178 (2025-01-23) set as policy "protecting and promoting the ability of individual citizens ... to maintain self-custody of digital assets" (EO 14178 §1(a)(i)).
- It also created the working group whose report recommended the withdrawal.
- The EO itself names neither proposal.
Reaction (news; summaries are mine): - Coin Center: Executive Director Peter Van Valkenburgh welcomed it on X. He warned that "the underlying statutory authority to create new, similar bad rules remains" (Decrypt, 2026-10-06). - Crypto Council for Innovation: called it "positive for the digital asset ecosystem" (Cointelegraph). - The Digital Chamber: welcomed it, according to CoinDesk as summarized in Yahoo Finance (Nolan Pratt, 2026-10-06). - Contested view: the same Yahoo Finance piece argues the withdrawal leaves flows from self-custody wallets into US on-ramps unmonitored at the federal level, citing Chinese capital-flight and laundering data. That is the author's analysis. The piece also says the notices were posted "on a Sunday"; 2026-10-05 was a Monday, as Decrypt and Cointelegraph report. - Context: the withdrawal removes proposals only. Existing BSA duties on exchanges stay in force (UseTheBitcoin; Digital Chamber via Yahoo). - Opposition: I found no on-record statement from a member of Congress or an advocacy group opposing the withdrawal in the coverage I checked (unverified absence).
5. The 2023 crypto-mixer proposal and its withdrawal
| Field | Value |
|---|---|
| Document | "Proposal of Special Measure Regarding Convertible Virtual Currency Mixing, as a Class of Transactions of Primary Money Laundering Concern". FR Doc 2023-23449, 88 FR 72701–72723, published 2023-10-23, signed 2023-10-19 by Andrea M. Gacki, FinCEN Director. RIN 1506-AB64; docket FINCEN-2023-0016 (saved) |
| Authority | USA PATRIOT Act §311 (31 U.S.C. 5318A). FinCEN called it its "first ever use of the Section 311 authority to target a class of transactions" (FinCEN press release, 2023-10-19) |
| What it required | Covered US financial institutions would report transactions they "know, suspect, or have reason to suspect" involve CVC mixing within or involving a jurisdiction outside the US, within 30 days of detection. Reports would include: amount; CVC type; mixer used; customer wallet address; transaction hashes; date; IP addresses; and a narrative. Institutions would also keep customer records: full name, date of birth, address, email and ID numbers (88 FR 72701; 91 FR 63513) |
| Definition of "CVC mixing" | Facilitating CVC transactions in a way that obscures source, destination or amount: pooling; algorithmic coordination; splitting; single-use wallets; swapping between assets; user-initiated delays (91 FR 63513–14) |
| Comment period | Closed 2024-01-22 (88 FR 72701). The docket shows 2,160 comments (regulations.gov API, 2026-10-09); the PWG report says "over 2,200" (printed p. 107) |
| Supporters | Treasury: Deputy Secretary Wally Adeyemo and Director Gacki, citing Hamas, Palestinian Islamic Jihad and North Korea (2023-10-19 press release) |
| Opponents | Commenters who warned the "expansive definition" would chill legitimate activity and burden institutions, as summarized by FinCEN itself (91 FR 63514). Coin Center fought it for years (Decrypt). I did not retrieve the individual mixer comments. |
| Agenda history | Final action 12/2024 (Spring 2024) → 09/2025 (Fall 2024) → "To Be Determined" (Spring 2025) → Long-Term Actions, 12/2027 (2026 agenda) (saved) |
| PWG report (July 2025) | Lawful users "may leverage mixers to enable financial privacy"; Treasury "should consider next steps" (printed p. 107) |
| Withdrawal | FR Doc 2026-20429, 91 FR 63513–63514, published 2026-10-06, signed by Jimmy L. Kirby. Withdraws both the §311 finding and the proposed rule. FinCEN "will continue to monitor" mixers and "may take appropriate steps in the future". |
Two errors in the mixer withdrawal notice: - Wrong RIN. The notice's header shows RIN 1506-AB47 (the wallet rule's number). The 2023 mixer NPRM and every Unified Agenda entry for it use 1506-AB64. - A quotation I could not find. The notice quotes the PWG report, citing p. 100, as saying "the Trump Administration supports the ability of lawful users of digital assets to privately transact on a public blockchain." That sentence does not appear in the report PDF I saved. The nearest wording is on printed p. 111: "The Working Group supports civil liberties protections surrounding privacy and the ability of individuals to privately transact on public blockchains."
6. The other 2020 proposal: lowering the travel-rule threshold
- The proposal. "Threshold for the Requirement To Collect, Retain, and Transmit Information on Funds Transfers and Transmittals of Funds ...". FR Doc 2020-23756, 85 FR 68005, 2020-10-27; a joint proposal by the Federal Reserve Board and FinCEN, RIN 1506-AB41.
- It would have cut the recordkeeping and travel-rule threshold from $3,000 to $250 for transfers that begin or end outside the US.
- It would also have made clear that these rules cover CVC (saved).
- Withdrawn in the agenda. The Spring 2025 Unified Agenda lists it as "Withdrawn 04/16/2025" (saved).
- Announced in the report. The PWG report announced the withdrawal (printed p. 100).
- No Federal Register notice found. The Federal Register API shows no withdrawal notice for 85 FR 68005 as of 2026-10-09, unlike the two October 2026 notices.
- What stays in place. The existing $3,000 funds-transfer recordkeeping and travel rules remain (described in 85 FR 83840 §II.C).
7. Things that actually were "blocked", and may be getting mixed up
| Item | What happened | Source |
|---|---|---|
| IRS "DeFi broker" rule (89 FR 106928, 2024-12-30): gross-proceeds reporting by DeFi front-ends | Repealed by Congress under the Congressional Review Act. H.J. Res. 25 passed the House 2025-03-11 and the Senate 2025-03-26, and was signed 2025-04-10 as Public Law 119-5. The rule "shall have no force or effect". This is an IRS rule, not FinCEN, and it concerned brokers, not wallet registration. | PL 119-5 |
| CLARITY Act, H.R. 3633 (includes self-custody protections) | The Senate rejected cloture on the motion to proceed, 49–50, on 2026-09-15 (Roll Call Vote 234, 119th Congress, 2nd session). Here what was blocked was a pro-self-custody bill. | Senate vote 234 |
8. Related federal bills on self-custody
The bills below say an individual may keep their own wallet and transact peer to peer. Each one also contains a rule of construction preserving enforcement powers: the CLARITY texts keep Treasury's and regulators' Bank Secrecy Act, special-measure and sanctions authority, and FIT21 keeps FinCEN's power to "carry out any enforcement action". So none of them, as written, would forbid a rule like the 2020 proposal, which regulated exchanges rather than wallet owners. That reading is mine; check it against the text.
- H.R. 3633, Digital Asset Market Clarity Act of 2025 (119th Congress).
- House-passed text: §105(c) "Protection of Self-Custody" gives a US individual the right to keep a hardware or software wallet and to transact peer to peer with non-financial-institution counterparties. §512 adds a matching "Sec. 22. Protection of Self-Custody" to the GENIUS Act (engrossed text).
- House vote: passed 294–134 on 2025-07-17, as reported by Yahoo Finance (Ahmed Barakat, 2026-09-28). I did not check the House Clerk roll call.
- Senate: received 2025-09-18 and referred to Banking. Reported 2026-06-01 by Sen. Tim Scott with a full
substitute (Calendar No. 423). The substitute includes:
- §605 "Keep Your Coins Act": "A Federal agency may not prohibit, restrict, or otherwise impair the ability of a covered user to self-custody digital assets using a self-hosted wallet";
- §604 "Blockchain Regulatory Certainty Act" (reported text).
- Status 2026-10-09: cloture failed on 2026-09-15 (above). No later Senate vote on H.R. 3633 appears in the Senate roll-call list. Yahoo/Barakat reports that Sen. Thom Tillis entered a motion to reconsider (unverified). Not law.
- H.R. 4763, FIT21 (118th Congress).
- §105(d) "Protection of Self-custody": "The Financial Crimes Enforcement Network may not issue any rule or order that would prohibit a U.S. individual from" keeping a hardware or software wallet or transacting with self-custodied assets for lawful purposes.
- The text is the House-engrossed version, so it passed the House (govinfo).
- It died when the 118th Congress ended (not separately verified).
- The administration's position. The PWG report asks Congress to write two self-custody principles into law: individuals may hold their own assets without an intermediary, and may transact directly with other self-custodians (printed p. 108).
9. Related state laws (self-custody, "Bitcoin rights")
State laws cannot override federal BSA rules on exchanges; they mainly stop state and local governments from restricting self-custody. - Kentucky HB 701 (2025): signed 2025-03-24 (Acts Ch. 50). The legislature's summary says it "allows individuals to use digital assets and wallets" and sets rules for running a node (bill record). - Oklahoma HB 3594 (2024): approved by the Governor 2024-05-13 (bill record). The Satoshi Action Fund says it protects self-custody, home mining and peer-to-peer transactions (its claim; I did not read the enrolled text). - Other states (unverified). The Satoshi Action Fund also claims similar laws in Louisiana (HB 488), Missouri, Utah (HB 230), South Carolina and others (satoshiaction.io/work). I have not checked these against the legislatures; the parallel state files should.
10. Current status (checked 2026-10-09)
- 2020 unhosted-wallet proposal (85 FR 83840): withdrawn as of 2026-10-06 (91 FR 63514). FinCEN "will take no further action". Any similar rule would need a new proposal with a fresh comment period. The underlying BSA authority is unchanged (Coin Center, via Decrypt).
- 2023 mixer proposal (88 FR 72701): withdrawn as of 2026-10-06 (91 FR 63513). FinCEN says it may act on mixers in the future.
- 2020 travel-rule threshold proposal (85 FR 68005): withdrawn in the Unified Agenda (2025-04-16); no Federal Register notice found.
- No pending FinCEN proposal requires wallet registration. The 2026 stablecoin-issuer customer-identification proposal says that "purely secondary market payment stablecoin activity" does not create an account relationship. Its example is sending a stablecoin from a self-hosted wallet to a vendor. Neither does merely holding a stablecoin (91 FR 37234, at 37239–40).
- What still applies: existing BSA duties on exchanges and other MSBs: customer identification, suspicious activity reports, and $3,000 funds-transfer records. Neither withdrawal changed them.
Could not confirm / open questions
- Supporting comments on the 2020 rule. I could not run a full keyword search of the 8,274 comments: the regulations.gov API rate-limited me after the first few queries. Every comment I read opposed the rule.
- Individual comments on the mixer rule were not retrieved, so the mixer "opponents" entry rests on FinCEN's own summary and Decrypt.
- The Spring 2024 "Withdrawn 04/12/2024" entry for RIN 1506-AB47. I found no Federal Register notice or press release explaining it, so why the Biden-era FinCEN marked the rule withdrawn then, without publishing a notice, is unknown.
- The PWG quotation in the mixer withdrawal (section 5) could not be found verbatim in the report.
- The House vote count on H.R. 3633 (294–134) and Tillis's motion to reconsider come from news, not primary records.
- Letters from members of Congress opposing the 2020 rule were reported at the time, but I did not retrieve any, so none are cited here.
- State "Bitcoin rights" laws other than Kentucky HB 701 and Oklahoma HB 3594 (signing only) are unverified.
Spark run on this topic (pointer added by the completeness check, 2026-10-09)
The local Spark run 20261009-144031--in-2026-did-fincen-or-the-us-treasury-propose-a-rule-requiri finished on 2026-10-09. Its findings are not merged into this note yet. Its CONTESTED and
UNDOCUMENTED answers, the claims its verifier rejected or found only partly supported, the facts it dropped, and the
pages it refused or skipped are all listed and flagged in RESEARCH-STATUS-2026-10-09.md § 6, as the editor asked
(include everything the Spark rejects, labelled). All eight of its sub-answers were CONFIDENT. Its rejected material is mainly five fincen.gov and treasury.gov pages it refused because their robots.txt was unreachable.