The US Treasury’s Financial Crimes Enforcement Network (FinCEN) has withdrawn a 2023 proposal that would have treated international crypto mixing as a primary money laundering concern, citing warnings that the measure could discourage lawful privacy use and load banks and other covered firms with heavy reporting duties.
In a notice filed for Federal Register publication on October 6, 2026, FinCEN pulled both its formal finding and the attached proposed special measure.
The action closes a rulemaking first published on October 23, 2023, under section 311 of the USA PATRIOT Act.
That statute lets Treasury designate certain foreign jurisdictions, institutions, account types, or classes of transactions as presenting a primary money-laundering concern, then impose extra recordkeeping or reporting on U.S. financial institutions.
Because the mixing proposal was never finalized, the withdrawal does not alter existing Bank Secrecy Act duties.
The abandoned plan would have required covered institutions to file reports when they knew, suspected, or had reason to suspect that a convertible virtual currency transfer involved mixing inside or linked to a jurisdiction outside the United States.
“Mixing,” as FinCEN defined it, meant any facilitation that obscured the source, destination, or amount of one or more transactions, regardless of the protocol or service used.
The definition reached pooling coins from multiple people or addresses, using code to rearrange a transfer, splitting value across independent hops, routing funds through single-use wallets, swapping between asset types, and inserting user-initiated delays.
A “mixer” would have included any person, group, service, code, tool, or function that enabled that activity.
Reports would have captured the amount and type of crypto, the mixer involved, customer wallet addresses, transaction hashes, dates, IP addresses, and a narrative description.
Institutions would also have had to retain identifying details on the customers tied to those transfers, including name, date of birth, address, email, or other unique identifiers.
FinCEN said the retreat was shaped by public comments arguing that this definition was so broad it could chill legitimate activity and impose a large compliance burden.
The notice also points to a July 2025 report from the President’s Working Group on Digital Asset Markets, created under Executive Order 14178.
That report said the administration supports lawful users’ ability to transact privately on public blockchains, acknowledged that criminals use mixers to hide and launder funds, and noted that ordinary users may also use them for financial privacy.
It recommended that Treasury reconsider next steps on the mixing proposal.
The bureau did not abandon its underlying concern.
It said illicit actors still use mixers and related tools to impede investigations, that it will keep watching mixer activity for signs of money laundering, terrorist financing, or other illicit finance, and that it may act later if needed.
Deputy Director Jimmy L. Kirby signed the withdrawal.
The same day, FinCEN separately withdrew a December 2020 proposal that would have required banks and money services businesses to verify customers and keep records on certain transactions involving self-hosted wallets.
The agency said both withdrawals follow review of comments and fit a broader effort to make digital-asset rules fit for purpose. Existing anti-money-laundering and sanctions rules for digital asset businesses remain in force.