The U.S. Treasury Department has withdrawn its proposal to monitor cryptocurrency

The U.S. Treasury Department withdrew two crypto-espionage bids

A turning point in privacy.
The U.S. Treasury Department by the Financial Crimes Enforcement Network has rescinded two long-delayed crypto vigilance proposals, citing them as a major victory for privacy advocates and the digital asset industry in filing Monday's documents to repeal an unattended wallet rule[24] and a plan[25] that designates cross-border mergers of digital assets as a business group causing primary financial disclosure concerns. Both regulations appeared in the Federal Register on Tuesday.[26]

Coin Center, a Washington-based crypto policy group, called the news an important victory for financial privacy on Monday, noting that its definition of blending is very broad, covering techniques commonly used by cryptocurrency users to preserve their privacy due to networks where financial crime law enforcement recognizes difficulty in identifying which transactions are taking place.

Data scope and reporting requirements
Uncustodial wallet rules require banks and other financial institutions to report certain crypto transactions in excess of 3,000 U.S. dollars and 10,000 US dollars when customers hold digital assets in unsupervised wallets The scope of the mixing offer is broader, being defined as any activity that obscures the source, destination or amount of a cryptocurrency transaction covering money mergers, split transfers, one-time use of wallets, and trades between assets

The Financial Crimes Enforcement Network noted that commenters warned the definition could put legitimate activities under pressure to stop, and would overwhelm financial institutions with a large number of documents. If the rule were to take effect, financial institutions would have to submit wallet addresses, business hashes,IP and customer identification information.

Support from the White House and law enforcement stands out.
The policy reversal is consistent with the direction of a White House report by the President's Task Force on Digital Asset Markets in July,2025 stating that the Trump administration supports the ability for legitimate digital asset users to transact privately on public blockchains, and asking the Treasury Department to review such regulations.

The Financial Crimes Enforcement Network did not give the green light for the merger. Authorities noted that perpetrators continue to use mixing and tooling with other means to impede law enforcement investigations, and will conflate money laundering with terrorist financing further in the future.

For crypto holders and financial institutions, the withdrawal of proposals means that reporting burdens and disclosures under these rules will be gone but not reduced in severity to illegal business. Originally reported by Bitcoin Magazine Written by Mathew Di Salvo