US FinCEN Withdraws Proposed Rules on Unhosted Crypto Wallets and Mixers

The U.S. Financial Crimes Enforcement Network has officially withdrawn two proposed regulations targeting unhosted digital asset wallets and crypto mixing services. The move cancels a December 2020 proposal requiring financial institutions to verify identities and record transactions over $3,000, as well as report transfers exceeding $10,000 involving unhosted wallets. It also drops a 2023 proposal classifying international crypto mixing as a primary money laundering concern under the USA PATRIOT Act. Regulators cited industry warnings that the measures imposed excessive compliance burdens and risked chilling legitimate digital asset activity.