U.S. Backs Off Personal Crypto Wallets: Six-Year-Old Proposal Shelved!

FinCEN, part of the U.S. Department of the Treasury, has withdrawn its 2020 proposal to impose new reporting and recordkeeping requirements on certain transactions involving crypto wallets controlled by their users.

According to a statement reported by Wu Blockchain and included in the withdrawal document, the U.S. Financial Crimes Enforcement Network (FinCEN) will take no further action on the proposal. The withdrawal document concerning the proposal published on December 23, 2020, is scheduled to be published in the Federal Register on October 6, 2026.

What information would have been required for crypto transfers?

The proposal would have required banks and money services businesses to report transactions over $10,000 and verify customer identities when the transactions involved users’ self-hosted wallets or certain other covered wallets. It also would have required recordkeeping for transactions over $3,000.

Financial institutions were the intended targets of the regulation; certain transfers made using wallets managed by users without entrusting them to an exchange or another service provider would have fallen within the proposed requirements. Following the withdrawal decision, these additional requirements will not move forward under this proposal.

How did FinCEN explain its withdrawal decision?

FinCEN described the decision as part of the Trump administration’s effort to right-size digital asset regulations. The withdrawn text was a proposed regulation, not a rule in effect.