Treasury withdraws crypto mixing rule, citing concerns over ‘chilling effect on legitimate activity’

Key Summary

The US Treasury Department's Financial Crimes Enforcement Network (FinCEN) has withdrawn its 2023 proposal to designate international crypto mixing as a "primary money laundering concern" under the USA PATRIOT Act, citing concerns that the rule could have a "chilling effect on legitimate activity." The proposal, which would have required banks to file reports on mixing transactions, was met with comments expressing concerns that it would stifle legitimate use of mixers for privacy reasons. FinCEN also withdrew a 2020 proposal requiring banks to verify customer identities and keep records on self-hosted wallet transactions.