US Treasury Scraps Crypto Wallet Tracking and Mixer Plans

A proposal to monitor personal crypto wallets has been withdrawn by the US Treasury. The shelved rule would have forced banks and exchanges to log transfers over $3,000 and to notify authorities about payments above $10,000.

The Financial Crimes Enforcement Network, or FinCEN, the Treasury’s anti-money-laundering bureau, said it would not pursue the 2020 proposal. A separate measure aimed at crypto mixing was also dropped that day.

Crypto Privacy Wins?

An “unhosted,” or personal, wallet is software or hardware that people use to store their own coins rather than handing them over to a bank or exchange.

The 2020 proposal would have required businesses to confirm the identity of a customer and maintain records once a transaction using such a wallet exceeded $3,000.

Any transfer beyond $10,000, or multiple transactions adding up to that amount within a 24-hour period, would have prompted a report to FinCEN.

The rule never went into force. FinCEN’s filing stated that the withdrawal is intended to keep digital asset regulations “fit-for-purpose,” referencing a July 2025 White House crypto report.

“The Trump Administration supports the ability of lawful users of digital assets to privately transact on a public blockchain,” an excerpt in the FinCEN report said.

The change takes effect when it appears in the Federal Register on October 6.

Why Crypto Mixers Still Face Scrutiny

FinCEN also pulled a 2023 proposal on mixing, a process that combines coins from many users to obscure the source of funds. Companies would have filed reports on suspected mixing connected to a foreign link.

Previously, that rule was still shown on the Treasury’s regulatory agenda for final action in December 2027.

FinCEN said commenters warned that the proposed definition of mixing could stifle lawful activity. The bureau, however, said illicit actors are still using mixers and raised the possibility of action later.

The issue is also being pursued by prosecutors in court. Developer Roman Storm is facing a Tornado Cash retrial in April 2027 related to the Ethereum-based mixing service.

Obligations already on the books, like suspicious activity reports and sanctions screening, stay in effect. In the meantime, every Bitcoin transaction is still recorded on a public ledger, leaving wallet payments traceable.