The U.S. Treasury's Financial Crimes Enforcement Network has withdrawn two proposed rules that hung over crypto for years, CoinDesk reports. The first, dating to December 2020, would have forced banks and crypto businesses to report transfers of more than $10,000 involving customers' self-controlled wallets. The second, from 2023, would have subjected transactions involving crypto mixers to additional reporting requirements. Neither rule ever took effect.
The wallet proposal was the one that mattered. Filed in the final weeks of the first Trump administration, it would have required banks and money-service businesses like exchanges to file reports when customers sent more than $10,000 in crypto to or from unhosted wallets, including transactions that crossed the threshold when added together over 24 hours. Firms would also have had to collect information about the customer and about the wallet on the other side of the transfer.
An unhosted wallet is one where you control the private keys yourself rather than leaving the assets with an exchange or bank. In plain terms, the rule treated moving your own coins to your own wallet as something the government needed reported.
The mixer proposal would have gone a different direction, classifying crypto mixing transactions as a category of primary money-laundering concern.
FinCEN said the withdrawals advance the Trump administration's deregulatory agenda and its effort to create "fit-for-purpose" digital-asset rules.
The irony worth noting
The 2020 wallet rule was a Trump administration product. It landed in the final weeks of the first term, pulled in thousands of public comments, and then sat unresolved for nearly six years. The second Trump administration now gets to kill it and count the corpse toward its deregulatory totals. That is tidy political bookkeeping: propose a rule, let it rot, withdraw it, take credit for cutting red tape.
I don't want to overstate what changed. Nothing is different today for anyone holding their own keys, because neither rule was ever in force. What changed is the ceiling on what could have happened. For nearly six years the 2020 proposal existed as a loaded option for any future Treasury that wanted tighter reporting on self-custody. That option is gone, at least in that form.
What I'd watch next
Rules can be re-proposed. FinCEN withdrew these two; it did not promise to never write new ones. The mixer question especially is not going away, because the laundering concern behind it is not going away. If a future administration wants a reporting rule for unhosted wallets, it has to start the process from scratch, with new comment periods and new fights. That is a slower path than reviving a pending rule, and slower is better.
For now, self-custody in the U.S. keeps the footing it has had for the past six years. Given how it could have gone, that counts as a win.