The Treasury Department's Financial Crimes Enforcement Network, the bureau that writes anti-money-laundering rules, has formally withdrawn two proposals that bitcoin and crypto users fought for years. The first, from December 2020, would have required banks and money-transfer businesses, including crypto exchanges, to collect information on the people on the other side of transfers to and from self-custody wallets, the "unhosted" wallets that people control themselves rather than through an exchange. The second, from October 2023, targeted crypto "mixers," services that pool and shuffle coins to hide where they came from. Neither rule was ever finalized, and neither would have required individuals to register their wallets; the obligations fell on financial institutions. The withdrawals took effect October 6. FinCEN said it acted "as part of the Trump Administration's deregulatory agenda and ongoing efforts to ensure digital asset regulations are fit-for-purpose." It attributed to a July 2025 White House report the line that the administration "supports the ability of lawful users of digital assets to privately transact on a public blockchain," a sentence American Banker reported does not appear in the report; the report did say that "lawful users of digital assets may leverage mixers to enable financial privacy." The agency also said that "illicit actors continue to use mixers," and the law that allowed the proposals remains in place: "the underlying statutory authority to create new, similar bad rules remains," said Peter Van Valkenburgh of Coin Center, a crypto policy group that opposed both.
What the wallet rule would have done
FinCEN proposed the rule on December 23, 2020, in the last weeks of President Trump's first term. Banks and money services businesses would have had to file a report, including the counterparty's name and physical address, and verify their own customer's identity, for transfers above $10,000 to or from an unhosted wallet, or several transfers adding up to more than $10,000 within 24 hours. For transfers above $3,000, they would have had to keep records and verify their customer's identity. The rule also covered "digital assets with legal tender status." FinCEN said criminals were using cryptocurrency for "terrorist financing, weapons proliferation, sanctions evasion," and ransomware payments, and, citing "significant national security imperatives," gave the public only 15 days to comment, closing January 4, 2021; it also said the rule was legally exempt from notice-and-comment requirements because it involved a foreign affairs function, though it took comments anyway. It reopened comments on January 15, 2021, citing additional legal authority and giving more detail on the reporting form, and on January 28, after President Biden took office, extended them to March 29, 2021. The public docket shows 8,274 comments.
Why it never took effect
The Biden administration never finalized the rule. Treasury's regulatory agenda, the government's twice-yearly list of planned rules, set target dates for final action of November 2021, then March 2023, then June 2024, and each passed. The spring 2024 agenda listed the rule as withdrawn as of April 12, 2024, though no withdrawal notice was published in the Federal Register then; Profoundd found no public explanation from the Biden Treasury for setting it aside. The formal withdrawal came this month, with FinCEN stating it "will take no further action" on the proposal. Crypto groups such as Coin Center, which said it had "vehemently opposed" both proposals, fought the rule during the comment period. FinCEN's withdrawal notice for the wallet rule does not discuss the comments it received; its news release says only that it "has considered the comments submitted in response to these proposals."
The mixer rule
The 2023 proposal, issued under President Biden, would have declared international crypto mixing a "primary money laundering concern" under the USA PATRIOT Act and required financial institutions to report transactions they suspected involved mixing, including wallet addresses, transaction hashes and IP addresses. FinCEN built its case largely on ransomware gangs and North Korean thieves who launder funds through mixers, American Banker reported. In withdrawing it, FinCEN said commenters had warned that its "expansive definition of CVC mixing" could have "a chilling effect on legitimate activity and place a large reporting burden" on financial institutions; the docket shows 2,160 comments. Among bank trade groups, only the Independent Community Bankers of America commented, and it argued the rule did not go far enough, American Banker found. FinCEN said it will keep watching mixer activity and "may take appropriate steps in the future," and Treasury's 2026 money-laundering risk assessment still lists mixers among tools criminals "commonly use."
What it means for wallet holders
Keeping bitcoin or other crypto in a wallet you control remains legal, and no federal rule requires individuals to register one. The withdrawal does not change existing anti-money-laundering duties: exchanges and other financial institutions still verify their customers and report suspicious activity, and banks keep that duty without a mixer-specific report, American Banker noted. A withdrawn proposal can be revived by a future administration; in 2020, FinCEN argued this one was exempt from public comment requirements on national-security grounds. For stablecoins, the dollar-pegged tokens covered by the GENIUS Act signed in July 2025, holding them in a self-custody wallet does not put them beyond reach: once the law takes effect, by January 2027 at the latest, issuers may operate only if they can comply with lawful orders to "seize, freeze, burn, or prevent the transfer" of their coins, and it preserves Treasury's existing power to block or restrict dollar stablecoin transactions. The same law exempts from its rules on who may issue or sell stablecoins "any transaction by means of a software or hardware wallet that facilitates an individual's own custody of digital assets," as well as direct transfers between two people acting for their own lawful purposes without an intermediary, and it excludes self-custodial software from its definition of a "digital asset service provider."
Was it tied to a digital dollar?
The wallet rule's text reached beyond bitcoin. It defined "digital assets with legal tender status" as "any type of digital asset issued by the United States or any other country that is designated as legal tender," a category that would have included a U.S. central bank digital currency, or CBDC, had one been issued. FinCEN said the rule was meant in part to address "the anticipated growth in LTDAs," noting that "many countries are developing" them, though it named no U.S. currency, and no U.S. CBDC exists. In 2022, President Biden's executive order on digital assets placed "the highest urgency on research and development efforts into the potential design and deployment options of a United States CBDC," calling for assessments of its "possible benefits and risks." In January 2025, President Trump revoked that order and barred federal agencies "from undertaking any action to establish, issue, or promote CBDCs." The House passed the Anti-CBDC Surveillance State Act, which would bar the Federal Reserve from issuing a CBDC to individuals, 219-210 in July 2025, and as of April it awaited Senate action. "CBDCs stand against everything we love in this country - privacy, freedom, and free market competition," said its sponsor, House Majority Whip Tom Emmer. Profoundd found no document showing the wallet rule was written to prepare for a U.S. digital dollar; the record shows its definitions would have covered one, and that FinCEN wrote it with government-issued digital currencies in mind.
This article reflects reporting through Friday morning, October 30, 2026. It is not legal or financial advice. Sources: Federal Register, wallet-rule withdrawal and mixer-rule withdrawal, October 6, 2026; FinCEN, news release; the 2020 proposal and its January 15 and January 28, 2021 notices; regulations.gov dockets FINCEN-2020-0020 and FINCEN-2023-0016; Treasury's regulatory agenda entries for RIN 1506-AB47 on reginfo.gov; American Banker; Decrypt; Executive Orders 14067 and 14178; Rep. Tom Emmer, news release, April 29, 2026; GENIUS Act, Public Law 119-27.
