Overview
- FinCEN filed formal withdrawal notices signed by Deputy Director Jimmy L. Kirby on Oct. 5 that are scheduled to publish in the Federal Register on Oct. 6 and the agency says it will take no further action on those specific rule texts.
- The 2020 'unhosted wallet' proposal would have required banks and money‑services businesses to collect counterparty information for transfers over $3,000 and to file reports for transfers over $10,000, a step critics said was practically hard to implement because custodial firms cannot reliably identify private‑key holders.
- The 2023 mixer proposal used Section 311 authority to label some foreign-linked mixing as a primary money‑laundering concern and would have required extra reporting from covered institutions, but FinCEN cited public comments and a White House working‑group finding that such a definition could chill lawful privacy uses.
- Withdrawal of the two drafts does not change existing anti‑money‑laundering, Bank Secrecy Act, or sanctions obligations for banks, exchanges, and money‑services businesses, and Treasury says it may still use targeted enforcement or new rulemaking in the future.
- Privacy and crypto advocacy groups praised the move as a win for self‑custody, but they and industry lawyers note the underlying statutory powers remain and similar or narrower rules could return from the Treasury or Congress, so firms should watch for new proposals and targeted naming of illicit services.