The U.S. Department of the Treasury has withdrawn two long-running Financial Crimes Enforcement Network rule proposals, one introduced at the end of Donald Trump’s first administration and the other in 2023 under Joe Biden’s administration. Coin Center, which opposed both initiatives, called the move a victory for financial privacy and Americans’ ability to use cryptocurrencies without what it described as excessive government surveillance.

Coin Center said the proposed rules could have significantly increased the amount of financial information the U.S. government collects about cryptocurrency users.

Proposed rules for unhosted wallets

At the end of Trump’s first administration, FinCEN proposed new requirements for financial institutions handling transactions involving so-called “unhosted wallets,” which users control directly rather than through banks or cryptocurrency exchanges.

The proposal would have required institutions to collect and retain counterparty information for transactions involving such wallets that exceeded $3,000. Institutions also would have had to file reports with FinCEN for transactions starting at $10,000.

Coin Center opposed the proposal, arguing that it would create a double standard for cryptocurrency transactions and allow the collection of sensitive financial information about people who were not customers of the institution involved.

Proposed reporting for mixer-related activity

FinCEN introduced the second proposal in 2023 under Biden’s administration. The agency sought to classify mixer-related activity tied to a foreign jurisdiction as a category of transactions posing a “primary money laundering concern.”

Financial institutions would have been required to report such activity when they knew, suspected or had reason to believe it was connected to cryptocurrency mixing.

Coin Center said the proposal defined crypto mixing too broadly and could have covered ordinary methods that cryptocurrency users employ to protect their privacy. The organization also warned that fear of regulatory risk could lead financial institutions to report activity that was entirely domestic.

Coin Center welcomes withdrawals

“We are pleased to see Treasury respond to concerns raised by Coin Center and others and abandon these efforts to subject cryptocurrency users to still greater financial surveillance,” the organization said.

Coin Center said the existing financial-surveillance system already creates large stores of sensitive personal information that could be misused or disclosed.

“Their official withdrawal finally closes that door. It is a major win for financial privacy,” the organization concluded.

FinCEN recently analyzed 33,904 suspicious activity reports and identified about $12.7 billion in transactions linked to pig-butchering-style cryptocurrency investment scams from September 2023 through the end of 2025. The agency estimated that Americans lost $7.2 billion to cryptocurrency scams in 2025 alone.

Source: Incrypted