FinCEN Withdraws Crypto Mixing and Self-Hosted Wallet Rule Proposals, Citing Chilling Effect on Legitimate Activity

FinCEN posted notices to the Federal Register’s public inspection site on Monday withdrawing crypto rule proposals, The Block reports. One withdraws its October 2023 finding that international crypto mixing is a primary money laundering concern, citing concerns the rule could have “a chilling effect on legitimate activity”. The other ends a December 2020 proposal that would have had banks and money services businesses keep records on customers’ transactions with self-hosted wallets above $3,000 and report those topping $10,000, per Decrypt.

Because neither proposal was finalized, the withdrawals do not change financial institutions’ existing obligations. The Federal Register text was not retrieved.