Funeral. FinCEN is withdrawing the 2020 rule that would have required banks and platforms to report each transfer of more than $10,000 to an unhosted wallet. The notice is in pre-publication in the Federal Register. Five and a half years after an open consultation between Christmas and New Year's Day, the most commented on proposal in the history of the agency will not see the light of day.
The key points:
Notice 2026-20430 withdraws the text of December 23, 2020. Declaration beyond 10,000 dollars, conservation and verification from 3,000: nothing will be applied.
The consultation, opened two weeks before Christmas, received more than 7,500 objections, a record for FinCEN.
Coinbase, Square and Coin Center denounced unverifiable data and an exodus of users from the United States.
KYC, suspicious transaction reports and Travel Rule continue to apply to American platforms.
FinCEN closes the file
The notice appeared on October 6, number 2026-20430, RIN 1506-AB47, signed Jimmy L. Kirby, deputy director of FinCEN. This withdraws the notice published in 2020 and the agency specifies that it will not take any action.
The text targeted transfers of cryptocurrencies, passing through a bank or a money services business as long as they came from an unhosted wallet. Thus, beyond 10,000 dollars, or this amount aggregated over 24 hours, the Money Services Business (MSB) had to make a declaration to the Treasury. From $3,000, they had to keep transaction and user data, and verify the identity of the latter.
FinCEN is not withdrawing the text because the 2020 objections would have changed its mind. Indeed, the decision refers to the report of the President's Working Group of January 23, 2025. This decree asks the executive to protect the access of citizens and businesses to public blockchains for lawful uses, including the right to hold and keep one's own keys. The withdrawal, writes the agency, serves to ensure that the regulation of digital assets is fit for purpose.
A widely criticized rule
The project dated from Steven Mnuchin's final weeks at Treasury. We discussed the subject in November 2020, when Brian Armstrong made public the rumor of a last-minute rule on self-hosted wallets. An unhosted wallet is a wallet for which the user himself holds the private keys, whether it is a Ledger or a Metamask. The banks would therefore have had to reconstruct the identity of the counterparty from what their own client declared, without any way of verifying it onchain.
The consultation lasted only two weeks, from December 23 to January 4, 2021. It received more than 7,500 contributions, a record for the agency. Coinbase, Square, Coin Center and the Blockchain Association filed the same complaint: forcing an intermediary to collect the identity of a third party who has not asked produces unverifiable data, and pushes users towards services installed outside the United States. The Biden administration froze the file in January 2021, along with other last-minute texts. FinCEN subsequently reopened the consultation, but never published a final version.
Removal does not disassemble the rest of the device. American platforms remain subject to the Bank Secrecy Act. They identify their customers, transmit their suspicious transaction reports and apply the Travel Rule, which requires the exchange of issuer and beneficiary data between service providers. Nothing prevents a future Treasury from putting an equivalent text back on the table either, since withdrawing one proposal does not prohibit the drafting of another. What disappears is the obligation to collect the identity of the holder of a wallet who has never become a customer, then to keep this data for five years. The threshold of $10,000 remains the one that the Bank Secrecy Act set in 1970 for cash.
