FinCEN Withdraws Proposed Crypto Mixer and Unhosted Wallet Rules
US anti-money laundering agency drops two crypto proposals
The US Treasury's Financial Crimes Enforcement Network (FinCEN) has withdrawn two proposed rules that would have changed how it polices crypto companies. One covered crypto mixing services, and the other dealt with unhosted wallets and reporting on crypto transactions. FinCEN announced the move in a notice published on Monday, October 5, 2026.
A mixer, also called a tumbler, is a service that scrambles the origin of crypto funds. It is used to make transactions harder to trace. An unhosted wallet is a crypto wallet that a person controls themselves, rather than one held by an exchange or another company.
The main details
- FinCEN pulled back a proposal first published in December 2020, which would have added recordkeeping, verification and reporting requirements linked to crypto transactions and unhosted wallets.
- It also dropped a proposal on the enforcement of crypto mixing services that had been put forward in October 2023.
- FinCEN said the mixer rule could have chilled lawful behavior and created a large reporting burden for covered financial institutions, meaning banks and similar regulated firms.
- The agency tied the decision to the Trump administration's deregulatory agenda.
- On the same day, Commodity Futures Trading Commission Chair Michael Selig said the CFTC would use its existing legal powers to propose two rules for crypto companies, without asking Congress for new authority.
What the FinCEN notice says
In the notice, FinCEN explained that it had reviewed the feedback it received during the public comment periods for both proposals. It wrote that it is withdrawing them as part of the Trump administration's deregulatory agenda, and as part of ongoing work to make digital asset rules "fit-for-purpose."
Because the proposals were withdrawn before they became final, they will not take effect as written. Both had been open for comment for years, and neither had been finalized.
Industry reaction
Groups that lobby for the crypto industry welcomed the decision. The Crypto Council for Innovation called the move positive for the digital asset ecosystem in a post on X on Monday. That reaction reflects the position of an advocacy group, not a regulatory finding.
What the source material does not explain
The notice, as described, does not say whether FinCEN plans to replace either proposal with new rules later, and it does not set out what the mixer proposal would have required in detail. The supplied material also does not describe what enforcement rules for mixers apply today, or whether other US agencies are moving on the same issue.
Part of a wider shift in US crypto policy
The withdrawal fits a broader pattern described in the source. US departments that oversee crypto have been tying their moves to the administration's crypto agenda, and the same day FinCEN acted, the CFTC said it would rely on powers it already has rather than seek new ones from Congress. For crypto companies and the banks that work with them, that means the rules in this area are still shifting rather than settled.
Sources
Newisty Editorial Team covers technology, cryptocurrency, digital products, online platforms, developer tools and the wider digital economy. Our content is researched from official sources, company announcements, public documentation, market data and other primary or reputable sources. Articles are reviewed and edited before publication for clarity, accuracy and useful context.
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