Requirements for Certain Transactions Involving Convertible Virtual Currency or Digital Assets; Withdrawal
Key claim: The Treasury Department’s FinCEN is abandoning a proposed rule that would have required banks and money transmitters to report, keep records on, and verify customer identity for crypto transactions involving unhosted wallets or wallets in certain foreign jurisdictions.
Abstract
(Proposed Rule · Treasury Department, Financial Crimes Enforcement Network) FinCEN is withdrawing a notice of proposed rulemaking (NPRM) that proposed requiring banks and money service businesses (MSBs) to submit reports, keep records, and verify the identity of customers in relation to transactions involving convertible virtual currency (CVC) or digital assets with legal tender status (LTDA) held in unhosted wallets or in wallets hosted in a jurisdiction identified by FinCEN. FinCEN will not take any further action on this NPRM.
Why this matters
The withdrawn proposal would have been the most prescriptive U.S. AML regime targeting self-custodied (‘unhosted’) crypto wallets, requiring banks and money transmitters to collect counterparty identity for transactions above dollar thresholds. Dropping it leaves routine BSA reporting (CTRs, SARs) as the governing framework for institution-to-unhosted-wallet crypto flows, while leaving open whether FinCEN revisits the issue through a different vehicle. It is a notable deregulatory signal within an otherwise expanding stablecoin and crypto AML perimeter.