Treasury Drops Crypto Surveillance Proposals

AI summary of the source article

The Treasury Department's Financial Crimes Enforcement Network (FinCEN) filed notices to withdraw two stalled crypto surveillance proposals: the 2020 unhosted wallet reporting rule and a 2023 plan classifying international crypto mixing as a primary money laundering concern. The wallet rule would have required reporting on certain transactions above $3,000 and $10,000 involving unhosted wallets, while the mixing proposal would have required institutions to submit wallet addresses, IP addresses, transaction hashes, and customer details. Privacy advocates and industry groups like Coin Center welcomed the withdrawal, arguing the mixing definition was overly broad. FinCEN noted it will continue tracking illicit finance.

Why it matters

The decision relieves financial institutions from impending compliance burdens, such as tracking IP addresses and customer identities for wallet transfers and mixing transactions, while preserving privacy protections for crypto users.

Key facts

• FinCEN is withdrawing its 2020 unhosted wallet rule and its 2023 crypto mixing surveillance proposal.
• The unhosted wallet rule would have required financial institutions to report certain crypto transactions exceeding $3,000 and $10,000.
• The mixing proposal would have mandated institutions to report wallet addresses, transaction hashes, IP addresses, and customer identity details.