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FinCEN withdraws proposed reporting rule for crypto mixing
FinCEN said the withdrawal notice will be published in the Federal Register on Oct. 6 and take effect upon publication.
The U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN) said it is withdrawing a proposed reporting rule for crypto mixing, a set of techniques intended to obscure a transaction’s source, destination, or amount.
According to CryptoSlate, FinCEN’s plan would have gone beyond dedicated mixing services, requiring financial institutions to report information about covered transactions and their customers, while also rescinding a prior 2023 finding that international crypto mixing is a class of transactions of primary money laundering concern.
FinCEN is also withdrawing the associated proposed recordkeeping and reporting rule, stating that Oct. 6 is the scheduled Federal Register publication date and that the withdrawal will take effect upon publication.
CryptoSlate reports FinCEN cited commenters’ concerns that the proposal’s expansive definition could chill legitimate activity and create a large reporting burden, applying regardless of the protocol or service used.