The United States Treasury Department's Financial Crimes Enforcement Network (FinCEN) has withdrawn two proposed rules that would have affected its oversight of cryptocurrency companies, including one covering "convertible virtual currency mixing."

In a Monday notice, the agency said it will withdraw a December 2020 proposal that would have imposed "recordkeeping, verification, and reporting requirements" on crypto transactions involving unhosted wallets—self-custodied wallets that let users hold digital assets directly rather than through an exchange or other intermediary—along with a separate proposal affecting the enforcement of crypto mixing services, which pool cryptocurrency from multiple users to obscure the trail between sending and receiving addresses. FinCEN said the mixer rule, first proposed in October 2023, "could have a chilling effect on legitimate activity and place a large reporting burden on covered financial institutions." Because neither measure had been finalized, the withdrawal means the recordkeeping, verification, and reporting duties outlined in the proposals will not be imposed on covered financial institutions.

"FinCEN has considered the comments submitted in response to these proposals and is withdrawing them as part of the Trump Administration's deregulatory agenda and ongoing efforts to ensure digital asset regulations are fit-for-purpose," the Monday notice said.

The withdrawal, detailed in a document filed for public inspection in the Federal Register, is the latest in a series of moves by US departments tasked with overseeing crypto assets under the Trump administration's digital asset agenda. Earlier on Monday, Commodity Futures Trading Commission Chair Michael Selig announced that the agency was using its "existing statutory authorities" to propose two rules on how crypto companies could operate under its purview without additional authority from Congress. With FinCEN stepping back from its proposals, the CFTC's two proposed rules stand as the next federal crypto rulemaking to watch under the administration's digital asset agenda.

Many advocacy groups for the crypto and blockchain industry lauded FinCEN for reversing course on crypto mixers and reporting requirements related to unhosted wallets. In a Monday X post, the Crypto Council for Innovation called the move "positive for the digital asset ecosystem."