FinCEN Drops Proposed Crypto Wallet and Mixer Reporting Rules

The Financial Crimes Enforcement Network (FinCEN) withdrew two proposed crypto rules on Oct. 5, one aimed at self-custody wallets and one at coin mixers.

The wallet plan reached the most ordinary move in crypto. U.S. banks and exchanges would have kept records and checked customer identity on transfers to or from a wallet they don't control above $3,000, and reported transfers above $10,000 to FinCEN, according to the withdrawal notice.

A player cashing out of a crypto casino to a personal wallet, then selling on a U.S. exchange, would have landed in that net. FinCEN said it will take no further action on the proposal, first published in December 2020.

FinCEN Says the Mixer Rule Went Too Far

The 2023 mixer proposal defined mixing broadly: pooling coins from several people, splitting a payment into a series of transfers, using single-use addresses, even swapping one coin for another.

Banks and exchanges would have reported amounts, wallet addresses, IP addresses and customer identities whenever they suspected mixing outside the United States.

In its mixer withdrawal notice, FinCEN said commenters warned the definition "could have a chilling effect on legitimate activity" and bury financial institutions in reports. Both notices cite a July 2025 White House digital asset report.

"The Trump Administration supports the ability of lawful users of digital assets to privately transact on a public blockchain."

That line from the White House report is quoted in the mixer notice, signed by FinCEN Deputy Director Jimmy L. Kirby.

Mixers Stay on the Watch List

The Treasury already lifted its sanctions on the Tornado Cash mixer on March 21, 2025, citing "novel legal and policy issues." FinCEN's notice still says illicit actors use mixers to hinder investigations, a point underlined when ZachXBT traced Bybit hack proceeds through a Lazarus laundering network.

The mixer withdrawal is not a closed door. FinCEN says it will keep monitoring mixer activity for signs of money laundering or terrorist financing and "may take appropriate steps in the future," without saying what would trigger a new rule.

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