FinCEN withdraws its unhosted-wallet transaction reporting proposal

What changed

FinCEN withdrew its December 2020 proposal for additional reporting, recordkeeping, and customer verification by banks and money services businesses for digital-asset transactions involving unhosted or otherwise covered wallets. The withdrawal takes effect October 6, 2026, and FinCEN will take no further action on this NPRM. It closes a proposed rulemaking rather than repealing an implemented reporting requirement.

Who it affects

• Banks and money services businesses handling covered digital-asset transfers
• Advisers evaluating client wallet transfers and digital-asset service providers

What is still open

• Whether FinCEN will pursue a different wallet-related proposal
• Which existing BSA and sanctions requirements apply to a particular transfer or service provider

What it means for an advisor

• Update diligence files and regulatory tracking to mark this proposal withdrawn
• Distinguish the abandoned proposed thresholds from requirements that independently apply to the provider or transaction