FinCEN (Financial Crimes Enforcement Network) withdrew two proposed crypto rulemakings on Monday, October 5, 2026. The decision scraps surveillance policies that the digital asset industry had fought for years over privacy concerns.
According to sources cited by Cointelegraph and Decrypt, the withdrawal of both rules took effect immediately on Monday and is scheduled to be published in the Federal Register on Tuesday.
Burying Trump- and Biden-Era Proposals
The first withdrawn proposal dates back to December 2020 during the first Trump administration. The rule would have required banks and money services businesses (MSBs) to record transactions involving unhosted or self-custodial wallets exceeding $3,000.
The reporting burden was even heavier for transactions above $10,000, which required financial institutions to submit detailed records including counterparty information. Critics argued the rule effectively extended the Bank Secrecy Act’s surveillance reach into users’ personal wallets.
The second withdrawn proposal was an October 2023 rule from the Biden administration targeting international crypto mixing practices. The policy sought to designate mixer services as a primary money laundering concern under the USA PATRIOT Act. Had it moved forward, financial institutions would have been required to report wallet addresses, transaction hashes, and even IP addresses tied to mixing activity.
Why FinCEN Reversed Course
In an official statement, FinCEN explained that the mixer rule risked chilling legitimate transaction activity. The agency also acknowledged that implementing the proposal would place a substantial reporting burden on regulated financial institutions.
The withdrawal notices cited a White House digital asset report published in July 2025. The government report affirmed the administration’s support for the right of legitimate digital asset users to transact privately on public blockchains.
FinCEN’s move aligns with a broader wave of crypto deregulation across US agencies responding to Trump’s crypto agenda. On the same day, CFTC Chairman Michael Selig also announced two new rules governing crypto firm operations.
A Warning Amid the Victory
The withdrawal marked a celebratory moment for Coin Center, the Washington-based crypto policy group that spent years fighting both proposals. Coin Center Executive Director Peter Van Valkenburgh welcomed the development as positive news for privacy advocates.
Writing on X, Van Valkenburgh noted, “It’s been a tough month for privacy and your right to use crypto. There are bright spots.” While commending the move, he cautioned the community that the government’s underlying authority to introduce similar rules remains intact.
For its part, FinCEN emphasized that it will continue to monitor mixer services for illicit finance links and reserved the right to take future action.
Source: Cointelegraph.
Disclaimer: This article is for informational and educational purposes only, not financial advice. Cryptocurrency assets are highly volatile and carry significant risk. Always do your own research (DYOR) and never invest more than you can afford to lose.
