The wallet-monitoring rule that had been hanging over us for 5 years and the mixer-reporting rule that had been hanging over us for 3 years were both withdrawn on the same day 🦖
📣 盘面异动群里喊
On October 5, FinCEN, the U.S. Treasury Department’s Financial Crimes Enforcement Network, withdrew two proposals at once: one introduced in 2020 targeting transfers to and from self-hosted wallets, and another introduced in 2023 targeting mixing activity. The withdrawal notices have been posted for public inspection and will be officially published and take effect on October 6.
First, let’s look at the proposal that had been on hold the longest. The 2020 wallet rule would have required banks, exchanges, and other regulated institutions to collect and retain information about the counterparties to transfers between a customer’s self-hosted wallet and a regulated institution whenever a single transfer exceeded $3,000. Transfers over $10,000 would also have required additional reporting. It may sound like just another form to fill out, but in practice it was nearly impossible to implement: an exchange can verify who its own customer is, but it can’t verify who controls the address on the other end of an on-chain transaction. The proposal drew widespread opposition and never took effect.
The other proposal was the 2023 mixer rule, which would have required regulated institutions to file special reports and keep records for transactions they knew, suspected, or had reason to suspect involved foreign mixing. It did not make mixing itself a crime; it simply imposed a new reporting obligation on the institutions handling these transactions. ⚖️
Both proposals have now followed the same path: the withdrawal notices were posted for public inspection on October 5, published in the Federal Register on October 6, and took effect that same day.
But there’s an important nuance that headlines can easily obscure: withdrawal doesn’t mean deregulation. The Bank Secrecy Act, sanctions lists, and each platform’s own risk controls remain unchanged. Exchanges can still ask you to explain an external transfer, suspend activity they consider suspicious, or impose limits. Self-hosted wallets remain a perfectly normal way to hold crypto, but that doesn’t put transfers between private wallets and regulated platforms beyond the reach of financial crime controls.
My take is that what’s really been removed is the requirement for platforms to “guess who that person on-chain is.” In practice, that requirement mostly generated massive numbers of false positives and excessive blocking, while delivering little in the way of security benefits. ⚠️
Viewed on a longer timeline, this fits the broader direction of the year: securities regulators are gradually approving innovation exemptions, tokenized stock pilots are moving ahead, and stablecoin legislation is progressing. Cut back where rules should be pared down, and build frameworks where they’re needed.
Still, let’s be clear: what was withdrawn was only a “proposal that had not yet taken effect.” Customer identification checks, sanctions compliance, and on-chain fund monitoring that are already in force remain fully intact. Any attempt to introduce new rules will have to go through the entire rulemaking process from the beginning. 📜
Do you think this is a genuine easing of regulation, or just a different way of regulating? Let’s talk in the comments.
Tap the profile picture to watch the livestream.
Every day, we bring you the latest in crypto regulation—not just what’s happening, but the logic and opportunities behind it. 👀🚀
📣 盘面异动群里喊
On October 5, FinCEN, the U.S. Treasury Department’s Financial Crimes Enforcement Network, withdrew two proposals at once: one introduced in 2020 targeting transfers to and from self-hosted wallets, and another introduced in 2023 targeting mixing activity. The withdrawal notices have been posted for public inspection and will be officially published and take effect on October 6.
First, let’s look at the proposal that had been on hold the longest. The 2020 wallet rule would have required banks, exchanges, and other regulated institutions to collect and retain information about the counterparties to transfers between a customer’s self-hosted wallet and a regulated institution whenever a single transfer exceeded $3,000. Transfers over $10,000 would also have required additional reporting. It may sound like just another form to fill out, but in practice it was nearly impossible to implement: an exchange can verify who its own customer is, but it can’t verify who controls the address on the other end of an on-chain transaction. The proposal drew widespread opposition and never took effect.
The other proposal was the 2023 mixer rule, which would have required regulated institutions to file special reports and keep records for transactions they knew, suspected, or had reason to suspect involved foreign mixing. It did not make mixing itself a crime; it simply imposed a new reporting obligation on the institutions handling these transactions. ⚖️
Both proposals have now followed the same path: the withdrawal notices were posted for public inspection on October 5, published in the Federal Register on October 6, and took effect that same day.
But there’s an important nuance that headlines can easily obscure: withdrawal doesn’t mean deregulation. The Bank Secrecy Act, sanctions lists, and each platform’s own risk controls remain unchanged. Exchanges can still ask you to explain an external transfer, suspend activity they consider suspicious, or impose limits. Self-hosted wallets remain a perfectly normal way to hold crypto, but that doesn’t put transfers between private wallets and regulated platforms beyond the reach of financial crime controls.
My take is that what’s really been removed is the requirement for platforms to “guess who that person on-chain is.” In practice, that requirement mostly generated massive numbers of false positives and excessive blocking, while delivering little in the way of security benefits. ⚠️
Viewed on a longer timeline, this fits the broader direction of the year: securities regulators are gradually approving innovation exemptions, tokenized stock pilots are moving ahead, and stablecoin legislation is progressing. Cut back where rules should be pared down, and build frameworks where they’re needed.
Still, let’s be clear: what was withdrawn was only a “proposal that had not yet taken effect.” Customer identification checks, sanctions compliance, and on-chain fund monitoring that are already in force remain fully intact. Any attempt to introduce new rules will have to go through the entire rulemaking process from the beginning. 📜
Do you think this is a genuine easing of regulation, or just a different way of regulating? Let’s talk in the comments.
Tap the profile picture to watch the livestream.
Every day, we bring you the latest in crypto regulation—not just what’s happening, but the logic and opportunities behind it. 👀🚀
