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FinCEN withdraws proposed crypto surveillance rules on unhosted wallets and mixing

FinCEN withdraws proposed crypto surveillance rules on unhosted wallets and mixing

Rule Changes

Treasury and the Federal Reserve abandon a third proposal, dropping a plan to cut the cross-border transfer reporting threshold from $3,000 to $250

5 days ago: FinCEN and Fed withdraw crypto travel rule proposal

Overview

Updated 4 days ago

The Treasury Department's Financial Crimes Enforcement Network and the Federal Reserve Board have dropped a six-year-old plan to require banks and money services businesses to collect identity data on international transfers of $250 or more. The threshold stays at $3,000, where it has been since 1995.

The withdrawal notice, filed Nov. 6, 2026, is scheduled for publication in the Federal Register on Nov. 9. It says more than five years have passed since the proposal, crypto markets have matured, and new laws such as the 2025 GENIUS Act for stablecoins have changed the picture. Existing Bank Secrecy Act duties are unchanged: exchanges still verify customers, file suspicious-activity reports and keep records on large transfers.

Why it matters

Moving crypto between an exchange and your own wallet won't bring the identity checks and federal reporting these three proposals would have required.

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Key Indicators

3
Proposed rules withdrawn
FinCEN pulled the wallet, mixing and travel-rule proposals without any taking effect.
7,500+
Public comments on 2020 unhosted wallet proposal
The proposed rule drew more than 7,500 public comments, most of them critical.
~3,000
Comments on the travel-rule proposal
Depository institutions, money services businesses, trade groups and individuals filed close to 3,000 comments before the proposal was withdrawn.
$250
Proposed travel-rule threshold
The 2020 proposal would have required identity data on international transfers of $250 or more; it was withdrawn on Nov. 6, 2026.
$3,000
Threshold that stays in place
With the travel-rule proposal withdrawn, the recordkeeping threshold for cross-border transfers remains $3,000.
$10,000
Reporting threshold
Under the withdrawn 2020 wallet proposal, transactions above $10,000 would have required reporting to the government.

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Organizations Involved

Financial Crimes Enforcement Network (FinCEN)
Financial Crimes Enforcement Network (FinCEN)
Federal bureau within the US Treasury
Withdrew three proposed crypto reporting rules, the last on Nov. 6, 2026; the travel-rule withdrawal is set for Federal Register publication Nov. 9

The Treasury bureau that enforces the Bank Secrecy Act. It proposed, then withdrew, three rules on crypto reporting.
U.S. Department of the Treasury
U.S. Department of the Treasury
Federal agency
Parent agency of FinCEN; its bureau withdrew three crypto reporting proposals in late 2026

The federal department that oversees FinCEN and announced the withdrawal of the proposed rules.
Federal Reserve Board
Federal Reserve Board
Federal financial regulator
Joined FinCEN in withdrawing the 2020 travel-rule proposal on Nov. 6, 2026; the notice is scheduled for Federal Register publication Nov. 9

The Federal Reserve Board co-wrote the 2020 recordkeeping and travel-rule proposal and joined FinCEN in withdrawing it.

Timeline

October 2020 November 2026

7 events Latest: 5 days ago
Tap a bar to jump to that date

  1. FinCEN and Fed withdraw crypto travel rule proposal

    Latest Regulatory Action

    The two agencies formally abandoned a 2020 plan to collect and pass on customer data for international transfers of $250 or more, down from $3,000. The notice, signed by FinCEN Deputy Director Jimmy L. Kirby and Board Secretary Benjamin McDonough, cited the five years since the proposal, changes in the crypto market and newer laws including the 2025 GENIUS Act. It is scheduled for Federal Register publication on Nov. 9, 2026 as document 2026-22809.

  2. Federal Register publishes withdrawal notices

    Publication

    Federal Register publishes official withdrawal notices for both proposed rules.

  3. Treasury withdraws both proposals

    Regulatory Action

    Treasury formally withdraws the unhosted wallet and mixing proposals, ending the rulemaking process.

  4. Wallet rule listed as withdrawn on regulatory agenda

    Regulatory Action

    The Spring 2024 regulatory agenda listed the unhosted wallet proposal as withdrawn, more than two years before FinCEN published its formal withdrawal notice.

  5. FinCEN proposes mixing special measure

    Rulemaking

    FinCEN proposes a special measure targeting crypto mixing as a money laundering concern.

  6. FinCEN proposes unhosted wallet rule

    Rulemaking

    FinCEN publishes a proposed rule requiring banks to verify and report unhosted wallet transactions.

  7. FinCEN and Fed propose $250 cross-border threshold

    Rulemaking

    The agencies proposed lowering the recordkeeping and travel-rule threshold for funds transfers beginning or ending outside the United States from $3,000 to $250, with new provisions for convertible virtual currency.

Scenarios

1

Congress passes new crypto AML law

Unlikely Resolves by End of 2027

Discussed by: Crypto industry analysts and AML compliance experts

Lawmakers respond to the withdrawal by introducing legislation that would codify similar requirements. The bill would require financial institutions to verify or report unhosted wallet transactions above a threshold. Such a law would face the same feasibility questions that sank the FinCEN rule.

2

FinCEN revives rules under new leadership

Possible Resolves by Q2 2028

Discussed by: Regulatory observers and crypto policy analysts

A future administration or new FinCEN director re-proposes similar rules with revised thresholds or scope. The rules would go through a new public comment period. This would restart the rulemaking process from scratch.

3

Withdrawal stands; no new targeted rules

Likely Resolves by End of 2027

Discussed by: Crypto industry advocates

The withdrawal is the end of the matter. Existing Bank Secrecy Act obligations remain in force, but no new targeted rules on unhosted wallets or mixing are proposed. The crypto industry continues to operate under the current regulatory framework.

Historical Context

3 moments from history that rhyme with this story — and how they unfolded.

1996

The Travel Rule (1996)

The Bank Secrecy Act's travel rule, added in 1996, requires financial institutions to pass customer information to the next institution in a wire transfer chain. The rule works because both ends of a wire transfer are regulated institutions.

Then

Financial institutions began sharing customer data on wire transfers above $3,000.

Now

The travel rule became a template for extending AML requirements to new payment methods, including crypto.

Why this matters now

The unhosted wallet rule was an attempt to extend the travel rule concept to self-custody crypto wallets, where the counterparty is not a customer of the institution.

March 2013

FinCEN's 2013 virtual currency guidance

FinCEN issued guidance defining virtual currency exchanges and administrators as money services businesses under the Bank Secrecy Act. This brought crypto businesses into the AML regulatory system for the first time.

Then

Crypto exchanges registered as money services businesses and began filing suspicious activity reports.

Now

The 2013 guidance established the framework that the 2020 unhosted wallet rule would have extended to individual wallet holders.

Why this matters now

The 2020 rule was the next step in FinCEN's effort to extend AML oversight deeper into the crypto ecosystem.

April 2016 - March 2017

Department of Labor fiduciary rule (2016-2017)

The Labor Department proposed a rule in 2016 requiring retirement advisors to act in clients' best interest. The rule drew massive public comment and industry opposition. The Trump administration withdrew it in 2017 before it fully took effect.

Then

The fiduciary rule was vacated and never enforced.

Now

The episode showed that rules proposed at the end of one administration are vulnerable to withdrawal by the next.

Why this matters now

The FinCEN unhosted wallet rule followed the same pattern: proposed in the final weeks of the Trump administration, it was withdrawn years later after sustained opposition.

Sources

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Crypto Briefing Federal Register OneBullEx Bitcoin Sistemi The Block American Banker Chain Daily Bitcoin.com News Crypto.News TokenPost Blockchain Reporter ABA Banking Journal RegXplora Law360 Federal Register Federal Register The Block