US Treasury Scrapped Controversial Rules for Crypto Wallets and Mixers

• The US has backed away from stepped-up crypto surveillance.
• The US Treasury has withdrawn rules targeting mixers and private wallets.
• Coin Center called it a win.

The US Department of the Treasury withdrew two long-running FinCEN rule proposals covering crypto transactions involving so-called “unhosted wallets” and activity involving crypto mixers. Coin Center, which has opposed these initiatives for years, called the move a victory for financial privacy and Americans’ right to use cryptocurrencies without excessive government surveillance.

The organization said both rules could have significantly expanded the amount of financial information the government collects about crypto users.

Which Rules They Wanted to Introduce

At the end of Donald Trump’s first administration, FinCEN proposed new requirements for financial institutions handling transactions involving “unhosted wallets” — wallets controlled directly by users rather than by banks or crypto exchanges.

The proposal would have required institutions to collect and retain counterparty information for transactions involving such wallets over $3,000, and to file reports with FinCEN for transactions starting at $10,000.

Coin Center opposed the initiative, arguing that it creates a double standard for crypto transactions and enables the collection of sensitive financial data even on people who are not customers of the institution in question.

The second proposal emerged in 2023 under Joe Biden’s administration. FinCEN wanted to classify mixer-related activity tied to a foreign jurisdiction as a category of transactions that pose a “primary money laundering concern.”

Financial institutions would have been required to report such activity if they knew, suspected, or had reason to believe it was connected to crypto mixing.

Coin Center Called the Decision a Win for Privacy

Coin Center said the proposal’s definition of crypto mixing was overly broad and could have captured ordinary ways crypto users protect their privacy. The organization also warned that, out of fear of regulatory risk, financial institutions might even report purely domestic activity.

“We are pleased to see Treasury respond to concerns raised by Coin Center and others and abandon these efforts to subject cryptocurrency users to still greater financial surveillance,” the organization said.

Coin Center added that the current financial surveillance system already creates large troves of sensitive personal information that could be misused or disclosed.

“Their official withdrawal finally closes that door. It is a major win for financial privacy,” the organization concluded.

As a reminder, FinCEN recently analyzed 33,904 suspicious activity reports and identified about $12.7 billion in transactions linked to pig butchering-style crypto investment scams from September 2023 through the end of 2025, and estimated that in 2025 alone Americans lost $7.2 billion to crypto scams.

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