FinCEN withdraws $10,000 crypto wallet reporting proposal

FinCEN withdrew its proposal for reporting crypto transfers above $10,000 involving self-hosted wallets, ending a rulemaking that began in 2020. The agency said on Oct. 5 that it had considered public comments and was acting under the administration’s deregulatory agenda, according to FinCEN’s announcement.

What would the wallet rule have required?

The 2020 proposal would have required banks and money-services businesses, including crypto exchanges, to report certain transfers to or from unhosted wallets when they exceeded $10,000. Transfers added together over 24 hours could have crossed the threshold, according to CoinDesk’s report.

Covered firms also would have collected information about the customer and the wallet on the other side of the transfer. An unhosted wallet is controlled by its owner, who holds the private keys, rather than by an exchange or bank.

Did the reporting requirement ever take effect?

No. The proposal remained unresolved for nearly six years and never took effect, so its withdrawal ends a proposed requirement rather than removing a reporting duty already in force.

FinCEN also withdrew a separate 2023 proposal that would have subjected crypto-mixer transactions to additional reporting requirements. The agency said both withdrawals followed its review of public comments and aimed to make digital-asset rules “fit-for-purpose.”

What happens to the rulemaking now?

FinCEN’s announcement confirms both proposals are withdrawn, but does not give a timetable for replacement rules or say whether it plans to propose new requirements. Any future reporting changes on these transactions remain unannounced.

Source material

• FinCEN’s announcement — fincen.gov
• CoinDesk’s report — coindesk.com