US Financial Crimes Enforcement Network (FinCEN) withdraws two crypto regulation proposals

The Financial Crimes Enforcement Network (FinCEN) affiliated with the US Department of Treasury withdrew two regulatory proposals that have been widely discussed in recent years in cryptocurrencies and that would give the state great power in monitoring.

FinCEN proposed a significant restriction in 2020, during Donald Trump's first term, for platforms and applications known as "decentralized wallets" in crypto, which mostly include cold and hot wallets other than exchanges. According to this request; Banks and other money service providers would be responsible for obtaining identification information about transactions. In other words, financial institutions would have to provide this information to FinCEN if requested.

In October 2023, FinCEN proposed some regulations for mixer platforms, which have been discussed for a long time. Here too; It was requested that mixing transactions be placed in a special money laundering risk category.

As you may remember, an employee of Tornado Cash, one of the most well-known of these mixers, was imprisoned in the USA for more than a year due to money laundering allegations.

Although FinCEN's proposal did not directly ban mixers, it did impose additional record-keeping on transactions and reporting obligations to FinCEN on financial institutions in the United States.

Today, these two regulations have been withdrawn by the institution.