On October 5, the U.S. Financial Crimes Enforcement Network (FinCEN) withdrew two proposed regulations concerning cryptocurrency. One proposal addressed remittances involving non-custodial wallets, while the other focused on mixing services.
Neither of these proposals was ever implemented. FinCEN representatives indicated that the agency took into account the feedback received and decided to retract these initiatives, aligning with the deregulatory approach of the Trump administration and adapting rules to the nature of digital assets.
Thresholds of $3,000 and $10,000
The first proposal was introduced in December 2020. It applied to banks and money service businesses (MSBs), including cryptocurrency firms, that conducted transactions with non-custodial or certain foreign wallets.
Under this proposal, institutions would be required to retain transaction and counterparty information for operations exceeding $3,000, as well as to identify their customers. For transactions over $10,000 or multiple transactions totaling over $10,000 within a 24-hour period, additional reporting to FinCEN was mandated.
As of this writing, the agency has officially ceased work on this project.
Special Measures for Mixers
The second proposal was related to a measure put forward in October 2023. FinCEN retracted both the proposed special measure and its conclusion that international transactions through crypto mixers were a class of transactions raising significant money laundering concerns.
At that time, FinCEN suggested, under Section 311 of the USA PATRIOT Act, enhanced recordkeeping and reporting requirements for financial institutions involved in such transactions.
The proposal defined mixing broadly as actions that obscure the source, destination, or amount of a cryptocurrency transaction. Examples included pooling funds from multiple users, splitting transfers, utilizing one-time addresses, and introducing delays between incoming and outgoing transactions.
In withdrawing this initiative, FinCEN referenced concerns from stakeholders that the broad definition could impact legitimate activities and impose significant reporting burdens on financial institutions.
This withdrawal aligns with a shift in the stance of U.S. authorities regarding privacy tools. In March, the U.S. Treasury sent a report to Congress acknowledging that crypto mixers could be utilized by law-abiding users to protect financial privacy, such as concealing information about personal savings, business payments, or donations.
For non-custodial services, the Treasury did not propose new restrictions, maintaining a focus on combating illegal financing.
In March 2025, the Treasury lifted sanctions on Tornado Cash following a court ruling. In August, the co-founder of the service, Roman Storm, was found guilty of operating without a license, but jurors could not reach a verdict on money laundering charges.
Later, Matthew Galeotti from the U.S. Department of Justice stated that the agency would cease pursuing developers of DeFi applications under the unlicensed money transmission statute.
Notably, in January 2026, senators Cynthia Lummis and Ron Wyden introduced a bill exempting programmers and providers of non-custodial services from the requirement to obtain money transmitter licenses.
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