The U.S. Treasury's Financial Crimes Enforcement Network (FinCEN) has withdrawn its proposal for a rule that would require financial institutions to report on cryptocurrency transactions that they "know, suspect, or have reason to suspect" involve mixing in a foreign jurisdiction. The proposal was first made in October 2023, and the government withdrew it this week, citing complaints from the crypto industry and privacy concerns.
"While FinCEN maintains that illicit actors continue to use mixers and other tools and methods to hinder law enforcement investigations, this withdrawal is informed by the concerns from commenters that the expansive definition of [Convertible Virtual Currency] mixing in the proposed rule could have a chilling effect on legitimate activity and place a large reporting burden on covered financial institutions," the withdrawal announcement states.
