FinCEN withdraws crypto mixer and unhosted wallet reporting proposals

FinCEN withdrew a 2023 proposal that would have made international virtual-currency mixing a class of transactions of primary money laundering concern and required financial institutions to report specified mixing activity.

A separate withdrawal ended a 2020 proposal covering transfers to or from unhosted and certain foreign-hosted wallets. That plan would have required reports above $10,000 and records above $3,000, including customer identity checks.

Neither proposal took effect.

FinCEN said expansive mixer definitions could chill legitimate activity and create a large reporting burden. It will keep monitoring mixers for illicit-finance indicators. The agency said it will take no further action on the older wallet proposal.