U.S. Drops $10,000 Crypto Reporting Proposal for Self-Custody Wallets

The U.S. Treasury Department has withdrawn a long-standing proposal that would have required banks and crypto businesses to report certain transfers above $10,000 involving self-custody wallets.

The Financial Crimes Enforcement Network, or FinCEN, withdrew the 2020 proposal on Oct. 5. The agency also scrapped a separate 2023 proposal targeting cryptocurrency mixing services. Neither rule ever took effect.

The decision removes years of uncertainty for crypto users who move assets between regulated platforms and wallets they control themselves. It also signals a shift in the U.S. approach to digital asset regulation.

Self-Custody Rules Come to an End

The 2020 proposal would have required financial institutions to collect information on certain transactions involving unhosted wallets. It also called for reporting transactions exceeding $10,000, including multiple transfers that crossed the threshold within 24 hours.

The proposal faced significant concerns over privacy, compliance costs and the practical challenge of identifying owners of self-custody addresses.

FinCEN said it considered public comments before withdrawing the measure. The agency described the move as part of the Trump administration’s deregulatory agenda and its effort to develop fit-for-purpose digital asset rules.

Mixer Proposal Also Withdrawn

FinCEN also abandoned its 2023 proposal concerning convertible virtual currency mixing. The measure would have imposed additional reporting requirements on certain transactions involving mixers.

Mixers can make blockchain transactions harder to trace by combining funds from multiple users. Regulators have linked some services to illicit finance, while privacy advocates argue that mixing can also have legitimate uses.

The withdrawal does not eliminate existing anti-money-laundering obligations for banks, exchanges and other covered financial institutions. Those firms must still comply with applicable Bank Secrecy Act requirements.

For the crypto industry, however, the decision removes two proposed regulatory regimes that had remained unresolved for years. CoinDesk reported that both proposals had remained pending without ever becoming effective.

The move could provide greater certainty for businesses supporting self-custody while leaving the broader U.S. crypto compliance framework intact.